Bhooma Ltd. issued 50000 Shares of Rs. 100 each payable as follows: Rs.20 on Application; Rs. 30 on Allotment; Rs.25 on First call and Rs. 25 on Final call. The company received applications for 40,000 shares and all these application accepted. All sums due on allotment, first and final calls were received except the first and final call on 400 shares. These 400 shares were subsequently forfeited by the company and re-issued at Rs. 80 per share. Give journal entries in the books of the company.
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Explanation:
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The journal entries for the given transactions in the books of Bhooma Ltd. are as follows:
1.On receipt of applications for 40,000 shares:
Bank A/c Dr. 8,00,000
To Share Application A/c 8,00,000
2.On the allotment of shares:
Share Application A/c Dr. 8,00,000
Share Allotment A/c 12,00,000
To Share Capital A/c 20,00,000
3.On receipt of money due on allotment:
Share Allotment A/c Dr. 12,00,000
To Bank A/c 12,00,000
4.On the first call:
Share First Call A/c Dr. 10,00,000
To Share Capital A/c 10,00,000
5.On receipt of money due on the first call:
Bank A/c Dr. 10,00,000
To Share First Call A/c 10,00,000
6.On the final call:
Share Final Call A/c Dr. 10,00,000
To Share Capital A/c 10,00,000
7.On receipt of money due on the final call:
Bank A/c Dr. 10,00,000
To Share Final Call A/c 10,00,000
8.On forfeiture of shares:
Share Forfeited A/c Dr. 32,000
Share First Call A/c 10,000
Share Final Call A/c 10,000
To Share Capital A/c 52,000
9.On the re-issue of forfeited shares:
Bank A/c Dr. 32,000
Share Forfeited A/c 32,000
Share Capital A/c Dr. 32,000
To Share Forfeited A/c 32,000
Bank A/c Dr. 32,000
To Share Capital A/c 32,000
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