Question

14. Y Ltd. forfeited 1,000 equity shares of Rs. 10 each, issued at a discount of 10% for
non-payment of the first call of Rs. 2 and the final call of Rs. 3 per share. Show the
necessary journal entry.

Answer 1

The journal entry for 1,000 equity shares of Rs. 10 each, issued at a discount of 10% forfeited for non-payment of the first call of Rs. 2 and the final call of Rs. 3 per share is as shown below.

Share Capital A/c Dr.      10,000

To Share Forfeiture A/c       4,000

To Share First Call A/c       2,000

To Share Final Call A/c       3,000

To Discount on issue of Shares A/c    1,000

(Being 1000 shares forfeited for non-payment of 1st & 2nd and call money)