Question:medium

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.

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Forfeiture entries should reflect the amount not received from shareholders, and reissue entries should show the amount received from new shareholders, adjusting for premium.
Updated On: Jan 13, 2026
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Solution and Explanation

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 shares × ₹ 8) & 16,000 & -- \\ Securities Premium A/c (2,000 shares × ₹ 2) & 4,000 & -- \\ To Share Forfeiture A/c (2,000 shares × ₹ 3) & -- & 6,000 \\ To Share Allotment A/c (2,000 shares × ₹ 5) & -- & 10,000 \\ (Forfeiture of 2,000 shares due to non-payment of allotment money) & & \\ \hline Bank A/c (1,500 shares × ₹ 7) & 10,500 & -- \\ Share Forfeiture A/c (1,500 shares × ₹ 1) & 1,500 & -- \\ To Share Capital A/c (1,500 shares × ₹ 8) & -- & 12,000 \\ (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 \\ (Transfer of surplus from reissue of shares to Capital Reserve) & & \\ \hline \end{tabular} \end{center}
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