Question

A company issued for public subscription 40,000 equity shares of Rs.10 each at a premium of Rs.2 per share payable as under:
On Application Rs.2 per share
On Allotment Rs.5 per share (including Premium)
On First Call Rs.2 per share
On Final Call Rs.3 per share

Applications were received for 70,000 shares. Allotment was made in pro-rata to the applicants for 50,000 shares, the remaining applications being refused. Money overpaid on applications was applied towards sum due on allotment. A to whom 1500 shares were alloted , failed to pay the allotment and call money. B, who applied for 2500 shares failed to pay the two calls. The shares of A and B were subsequently forfeited after the second call was made. 3000 of the forfeited shares were reissued @ Rs.8 per share fully paid. The reissued shares included all of A's shares.

Pass journal entries in the books of the company to record the above transactions

Answer 1

share application ac dr 70000×2 (140000)
to share capital 40000×2 (80000)
to bank ac 20000×2 (40000)
to share allotment ac 10000×2 (10000)