Question

Konark Ltd. invited applications for issuing 3,00,000 shares of 10 each.
The amount per share was payable as follows: 3 on application, 3 on
allotment, and 4 on first and final call.
The company received applications for 4,00,000 shares. Allotment was
done as follows:
Applicants of 2,40,000 shares were allotted 2,00,000 shares.
(ii)
Applicants of 1,20,000 shares were allotted 80,000 shares.
(iii) Remaining applicants were allotted 20,000 shares.
Money overpaid on applications was adjusted towards sums due on
allotment. Divij, a shareholder, belonging to group (ii), who had applied
for 6,000 shares, failed to pay allotment and call money. Faisal, another
shareholder, who was allotted 10,000 shares, paid the call money along
with allotment. Faisal belonged to group (i),
Divij's shares were forfeited after the first and final call. Half of the
forfeited shares were reissued @ * 10 per share fully paid.
Pass the necessary journal entries to record the above transactions in the
books of the company.​

Answer 1

Explanation:

i) Bank A/c                                     Dr                 1200000                    
     To Share Application A/c                                         1200000
(Being Application Money Received)

ii) Share Application A/c                  Dr                1200000
            To Share Capital A/c                                           300000                
            To Share Allotment A/c                                       900000
(Being Share Allotted and excess money transferred to equity share allotment)

iii) Share Allotment A/c                     Dr               900000
         To Share Capital A/c                                             900000
(Being Share Allotment Money Due)
 
iii) Bank A/c                                         Dr             634600
   Calls in Arrears A/c                          Dr                 6000
           To Share Allotment A/c                                         600000
           To Calls in Advance A/c                                           40000
(Being Allotment Money Received)

iv) Share First and Final Call A/c              Dr            1200000
                    To Share Capital A/c                                        1200000
(Being First Call Money Due)

v) Bank A/c                                                 Dr           1144000    
   Calls in Arrears A/c                                 Dr              40000
           To Share First and Final A/c                                        1184000
(Being First and Final Call Money Received)

vi) Share Capital A/c                                     Dr               40000
            To Share Forfeiture A/c                                                18000
            To Calls in Arrears A/c                                                  22000  
(Being Divij's shares forfeited for non payment of allotment and first call)

vii) Bank A/c                                                  Dr                   20000
          To Share Capital A/c                                                          20000
(Being Half of Divij's shares reissued for fully paid at rs 10 per share)

viii) Share Forfeiture A/c                                 Dr                    9000
         To Capital Reserve A/c                                                        9000
(Being Gain on Reissue of Forfeited Shares transferred to capital reserve)

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