3. A Company forfeited 1,000 shares of 10 each fully paid on which 7,000 has been paid. Out of these 800 shares were reissued upon payment of 7,600. Amount transferred to Capital Reserve will be :
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Share Forfeiture Entries
Share Capital A/c Dr. (1,000 x 10) 10,000
To Share Forfeiture A/c (1,000 x 7) 7,000
To Calls in Arrears A/c (1,000 x 3) 4,000
(Being 1,000 shares forfeited)
Share re-issue entry
Bank a/c Dr. (800 x 9.5) 7,600
Share Forfeiture a/c Dr. (800 x 0.5) 400
To Share Capital (800 x 10) 8,000
(Being 800 shares re-issued @ 9.5 per share and money received and loss on forfeiture (discount on face value) adjusted to share capital account)
Share Forfeiture A/c Dr. (800 x 6.5) 5,200
To Capital Reserve A/c (800 x 6.5) 5,200
(Being excess amount received on 800 shares adjusted to capital reserve)
Amount transferred to Capital Reserve = Rs.5,200
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