Question

Supreme Company Limited issued 10,000 equity shares of ₹ 100 each at a premium of ₹ 10 per share. The amount payable is as follows :
On application ₹ 20
On allotment ₹ 50 (including premium)
On first and final call ₹ 40.
All the shares were subscribed and money duly received except the first and final call on 500 shares.
The directors forfeited these shares and re-issued them as fully paid-up at ₹ 80 per share.
Pass the necessary journal entries regarding issue, forfeiture and re-issue of shares.

Hint:

In forfeiture entries, if the Securities Premium has already been received (as in this case with the allotment money), it is strictly ignored. Do NOT debit the Securities Premium account during forfeiture.

Answer 1