A Ltd issued 10,000 shares @Rs.10 each at a premium of Rs.2 per share payable On Application Rs.2 on application, Rs.5 on allotment (including premium), On first call Rs.3 and the balance on final call. Applications received for 30,000 shares and the Company made allotment on prorata basis to the applicants for 12,000 shares.
Ram the holder of 900 shares failed to pay the allotment money and on his subsequent failure to pay the first call his shares are forfeited. Krishna the holder of 500 shares failed to pay the first call and final call. His shares are forfeited after the final call. 1,000 shares are reissued @Rs.9 per share, the whole of Krishna's shares are included. Show journal entries
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Explanation:
Niharika Ltd. issued 10,000 equity shares of 10 each at a premium of 2 per share payable as follows:
On application
* 3 per share
On allotment
*5 per share (including premium)
On first and final call
*4 per share
Applications were recieved for 12,000 equity shares and pro rata allotment was made to all the applicants. The excess application money was adjusted with allotment.
Deepali who was allotted 20 shares failed to pay at first and final call and her shares were forfeited.
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