Question

Lazal Ltd. invited applications for issuing 2,00,000 equity shares of \rupee10 each, at 20\% premium. Amount per share was payable as follows: \rupee5 on application; \rupee4 (including premium) on allotment; and balance on first and final call. Public applied for 3,20,000 shares, out of which applications for 20,000 shares were rejected and shares were allotted on pro-rata basis to the remaining applications. Kavita, an applicant of 15,000 shares, failed to pay allotment and call money. Her shares were forfeited. Pass necessary Journal entries for the above transactions in the books of the company.

Hint:

When shares are forfeited, adjust unpaid amounts through the relevant accounts and debit the Share Forfeiture A/c for any losses.

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 & 16,00,000 &
& {0.5cm} To Share Application A/c & & 16,00,000
& (Application money received for 3,20,000 shares) & &
31-Mar-2023 & Share Application A/c & 16,00,000 &
& {0.5cm} To Share Capital A/c & & 10,00,000
& {0.5cm} To Share Allotment A/c & & 6,00,000
& (Transfer of application money on allotment and share capital) & &
31-Mar-2023 & Bank A/c & 6,80,000 &
& {0.5cm} To Share Allotment A/c & & 6,80,000
& (Allotment money received excluding Kavita's 15,000 shares) & &
31-Mar-2023 & Kavita’s Shares Forfeited A/c & 75,000 &
& {0.5cm} To Share Capital A/c & & 60,000
& {0.5cm} To Share Premium A/c & & 15,000
& (Forfeiture of Kavita’s shares for non-payment) & &
\end{tabular} \end{center}