Question

Pass necessary journal entries for forfeiture and reissue of shares in the following cases:
(i) Neon Ltd. forfeited 2,000 shares of ₹ 10 each issued at a premium of ₹ 2 per share for non-payment of allotment money of ₹ 5 per share (including premium). The first and final call of ₹ 2 per share was not yet made. Out of these, 1,500 shares were reissued at ₹ 7 per share, ₹ 8 paid up.

Hint:

Forfeiture entries should reflect the amount not received from shareholders, and reissue entries should show the amount received from new shareholders, adjusting for premium.

Answer 1

Journal Entries: \begin{center} \renewcommand{\arraystretch}{1.5} \begin{tabular}{|p{10cm}|r|r|} \hline Particulars & Dr Amount (₹) & Cr Amount (₹)
\hline Share Capital A/c (2,000 × ₹ 8) & 16,000 & --
Securities Premium A/c (2,000 × ₹ 2) & 4,000 & --
To Share Forfeiture A/c (2,000 × ₹ 3) & -- & 6,000
To Share Allotment A/c (2,000 × ₹ 5) & -- & 10,000
(Being forfeiture of 2,000 shares for non-payment of allotment money) & &
\hline Bank A/c (1,500 × ₹ 7) & 10,500 & --
Share Forfeiture A/c (1,500 × ₹ 1) & 1,500 & --
To Share Capital A/c (1,500 × ₹ 8) & -- & 12,000
(Being reissue of 1,500 forfeited shares at ₹ 7 per share, ₹ 8 paid up) & &
\hline Share Forfeiture A/c & 4,500 & --
To Capital Reserve A/c & -- & 4,500
(Being transfer of surplus on reissue of shares to Capital Reserve) & &
\hline \end{tabular} \end{center}