National Heavy Chemicals Ltd. issued 5,000 shares of 10 each at a premium of 2 per
share public subscription, payable as 5 on Application and 7 on Allotment (including
premium). Ramesh, who was allotted 200 shares by the company, failed to pay the
allotment amount and his shares were forfeited by the company. 100 out of these forfeited
shares were allotted to Brajesh as fully paid-up for 8 per share.
Record the transactions relating to Forfeiture and Re-issue of Shares.
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Share capital a/c. Dr 2000
security premium reserve Dr. 400
To Share allotment a/c. 1400
To share forfeited a/c. 1000
Bank a/c. Dr. 800
share forfeited a/c. Dr. 200
To share capital a/c. 1000
share forfeited a/ c. Dr. 300
To capital reserve 300
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