Question

Chand Ltd. invited applications for issuing 1,00,000 equity shares of \rupee10 each at a premium of \rupee2 per share. The amount per share was payable as follows: \rupee4 (including premium) on application, \rupee5 on allotment, and balance on first and final call. Applications were received for 1,80,000 shares of which applications for 30,000 shares were rejected and remaining applicants were allotted shares on pro-rata basis. Mansi holding 5,000 shares failed to pay first and final call money, and her shares were forfeited. Pass the necessary Journal entries for the above transactions in the books of the company.

Hint:

For pro-rata allotments, excess application money is adjusted towards allotment or call money. Record forfeitures carefully to account for unpaid calls.

Answer 1

% Journal Entries \begin{center} \begin{tabular}{|p{3cm}|p{8cm}|p{2.5cm}|p{2.5cm}|} Date & Particulars & Debit (\rupee) & Credit (\rupee)
31-Mar-2023 & Bank A/c & 7,20,000 &
& {0.5cm} To Share Application A/c & & 7,20,000
& (Application money received for 1,80,000 shares) & &
31-Mar-2023 & Share Application A/c & 7,20,000 &
& {0.5cm} To Share Capital A/c & & 4,00,000
& {0.5cm} To Share Allotment A/c & & 3,20,000
& (Transfer of application money to share capital and allotment) & &
31-Mar-2023 & Bank A/c & 4,75,000 &
& {0.5cm} To Share Allotment A/c & & 4,75,000
& (Allotment money received excluding Mansi’s 5,000 shares) & &
31-Mar-2023 & Share Forfeiture A/c & 20,000 &
& {0.5cm} To Share Capital A/c & & 10,000
& {0.5cm} To Share Premium A/c & & 10,000
& (Forfeiture of Mansi’s shares for non-payment) & &
\end{tabular} \end{center}