Question

directors of a company forfeited 500 shares of 10 each issued at a premium of 3 per share for the non payment of first call money 3 and the final call of 2 has not been made .half of these forfeited shares were reissued at 2500 fully paid .record the entries of forfeiture and reissue​

Answer 1

The Entries are given below. Hope this will help you.

Explanation:

Share capital A/c Dr.  4000

      To Share Forfeiture A/c 2500

      To Calls in Arrears A/c    1500

Here Share Capital account is debited with the called up amount i.e. rs 8.

Share forfeiture account is credited with the amount received on share i.e.rs 5 . Calls in arrears account is credited with the amount due but not paid i.e. rs 3.

Note we will not take securities premium account as it has already been received.

Now entry for re issue of share

Bank A/c Dr. 2500

 To Share Capital A/c 2000

 To Securities Premium A/c 500

rs 500 will be transferred to securities premium account as the called up value for these share is only rs 2000

Entry For Capital Reserve :

Share forfeiture A/c Dr. 1250

     To Capital Reserve A/c 1250

The amount related to the reissued shares are transferred to capital reserve account. This amount is half the total amount.