Question

Nitro Paints Ltd. invited applications for issuing 1,60,000 equity shares of ₹ 10 each at a premium of ₹ 3 per share. The amount was payable as follows:
Applications for 1,80,000 shares were received. Applications for 10,000 shares were rejected and pro rata allotment was made to the remaining applicants. Over payment received on application was adjusted towards sums due on allotment. All calls were made and were duly received except allotment and final call from Aditya who was allotted 3, 200 shares. His shares were forfeited. Half of the forfeited shares were reissued for ₹ 43,000 as fully paid-up.
Pass necessary journal entries for the above transactions in the books of Nitro Paints Ltd.

Answer 1

The necessary journal entries for the given transactions in the books of Nitro Paints Ltd are prepared below:

Explanation:

Shares Applied by Aditya

Shares Applied by Aditya

$=\frac{1,70,000}{1,60,000} \times 3,200=3,400$

Amount not paid by Aditya on Allotment

Amount received on Application  - Rs. 20,400

Less: Transferred to Share Capital - Rs. 19,200

Excess received on Application  - Rs. 1,200

Amount due on allotment  - Rs. 9,600

Less: Excess adjustment  - Rs. 1200

Amount unpaid by Aditya  - Rs. 8,400