Question

Mr. Long who was the holder of 2,000 preference shares of ₹100 each, on which ₹ 75 per share has been called up could not pay his dues
on Allotment and First call each at ₹ 25 per share. The Directors forfeited the above shares and reissued 1500 of such shares
mr long ltdto Mr.Short at ₹ 65 per share paid-up as ₹75 per share.
Give Journal Entries to record the above forfeiture and re-issue in the books of the company.
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Answer 1

Explanation:

1) equity share capital (2000×75) 150000

To call in arer (2000 x 50) 100000

To share Forefeture 50000

2) Bank (1500 x 65) 97500

share Forefeture 15000

To equity share capital (1500 x75) 112500

3) share Forefeture {(1500 x25) - 15000} 22500

To capital reserve 22500