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JJK Ltd. forfeited 100 shares of ₹10 each (₹8 called-up), issued at a premium of ₹2 per share, to Rahul, on which he had paid application money of ₹5 per share, for non-payment of allotment money of ₹5 per share (including premium). Out of these, 70 shares were reissued to Sanjay as ₹8 called-up, for ₹7 per share. Give the necessary Journal entries relating to the forfeiture and reissue of shares.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Share Capital A/c (100 × ₹8) Dr. | 800 | |||
| Securities Premium Reserve A/c (100 × ₹2) Dr. | 200 | |||
| To Share Forfeiture A/c (100 × ₹5) | 500 | |||
| To Calls-in-Arrears A/c (100 × ₹5) | 500 | |||
| (100 shares, ₹8 called-up with ₹2 premium, forfeited for non-payment of ₹5 per share, including ₹2 premium) | ||||
| Bank A/c (70 × ₹7) Dr. | 490 | |||
| Share Forfeiture A/c (70 × ₹1) Dr. | 70 | |||
| To Share Capital A/c (70 × ₹8) | 560 | |||
| (70 shares reissued to Sanjay at ₹7 per share, ₹8 paid-up) | ||||
| Share Forfeiture A/c Dr. | 280 | |||
| To Capital Reserve A/c | 280 | |||
| (Balance of the 70 reissued shares in Share Forfeiture Account transferred to Capital Reserve) |
Working Note: Share Forfeiture credit ₹5/share, less ₹1/share discount on reissue = ₹4/share × 70 shares = ₹280.
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 2 Chapter 1 Q.86 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
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