A) Asha Ltd. forfeited 100 equity shares of ₹ 20 each fully called up for non-payment of first call of ₹ 3 per share and final call of ₹ 5 per share. 80 shares of these were reissued at ₹ 15 per share fully paid B) Bhakti Ltd. forfeited 100 equity shares of ₹ 10 each, ₹ 6 called-up on which the shareholder paid application and allotment of ₹ 5 per share. Of these 80 shares were re-issued as fully paid-up for 16 per share. C) Konark Ltd. forfeited 50 shares of ₹ 10 each, ₹ 8 called-up. The shareholder failed to pay first call of ₹ 3 per share. Later on, 30 shares of these were re-issued at ₹ 7 per share. Pass Journal entries for the forfeiture and re-issue of shares in the following cases.




A) Asha Ltd. forfeited 100 equity shares of ₹ 20 each fully called up for non-payment of first call of ₹ 3 per share and final call of ₹ 5 per share. 80 shares of these were reissued at ₹ 15 per share fully paid 

 
B) Bhakti Ltd. forfeited 100 equity shares of ₹ 10 each, ₹ 6 called-up on which the shareholder paid application and allotment of ₹ 5 per share. Of these 80 shares were re-issued as fully paid-up for 16 per share. 
 
C) Konark Ltd. forfeited 50 shares of ₹ 10 each, ₹ 8 called-up. The shareholder failed to pay first call of ₹ 3 per share. Later on, 30 shares of these were re-issued at ₹ 7 per share. 

 

 

Solution:  

 

Journal Entries  

In the Books of Asha Ltd. 

Date 

Particulars 

J.F 

Debit  

Credit 

A 

1. 

Equity Share Capital A/c Dr. 

To Equity Share First Call A/c 

  To Equity Share Final Call A/c 

To Equity Share Forfeiture A/c 

[Being forfeiture of 100 equity shares due to non-payment of first call @ ₹3 and final call @ ₹5 per share] 

 

2,000 

 

300 

500 

1,200 

2. 

Bank A/c Dr. 

Equity Share Forfeiture A/c Dr. 

To Equity Share Capital A/c 

[Being re-issue of 80 forfeited shares @ ₹15 per share as fully paid-up] 

 

1,200 

400 

 

 

1,600 

3. 

Equity Share Forfeiture A/c Dr. 

To Capital Reserve A/c 

[Being proportion balance of Share Forfeiture A/c transferred to Capital Reserve A/c] 

 

560 

 

560 

 

 

 

 

 



In the Books of Bhakti Ltd.


 

 

 

 

 

Date 

Particulars 

J.F 

Debit  

Credit 

B 

1. 

Equity Share Capital A/c Dr. 

To Calls-in-Arrears A/c 

To Equity Share Forfeiture A/c 

[Being forfeited 100 equities share of 10 each] 

 

600 

 

100 

500 

2. 

Bank A/c Dr. 

To Equity Share Capital A/c 

[Being re-issue of 80 forfeited shares @ ₹ 6 per share as fully paid-up] 

 

480 

 

480 

3. 

Equity Share Forfeiture A/c Dr. 

To Capital Reserve A/c 

[Being proportionate balance of Share Forfeiture A/c transferred to Capital Reserve A/c] 

 

400 

 

400 

 

 

 

 

 




In the Books of Konark Ltd.






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