Question

Mcvities International Ltd issued 2,50,000 shares of 3 10 each at a premium of 2
payable as on application 3, on allotment * 4 (including premium), on first call 3 on
second and final call 2.
Ben who holds 1,000 shares failed to pay the first call money. The company has
forfeited the 1,000 shares after the first call. On forfeiture, amount debited to share
capital account will be​

Answer 1

Let's do journal entry :

Share capital A/c Dr. (1000×8) 8000

To forfeited share A/c(1000×5) 5000

To first call A/c (1000×3). 3000

(Being share forfeited)

Explanation :

Share capital A/c debited with (1000×8) 8000 because the second call and final call aren't made. And also, the securities premium reserve on the allotment is already received, so that's why it's not shown.