Question

Q1.
Medhi Industries Co. Ltd. issued 10,000 equity shares of 50 each, at a premium of 5 per
share, payable as follows:
On application: 10, On allotment: 25(Including Premium), On first call: 10. On second call: 10
The company received applications on 8,000 shares. All the applications were accepted and
shares were allotted. The company made both the calls. One shareholder holding 500 shares
failed to pay the final call. His shares were forfeited. Pass journal entries in the books of Medhi
Industries Co. Ltd.​

Answer 1

JOURNAL ENTRIES IN THE BOOKS OF MEDHI INDUSTRIES CO. LTD.

Explanation:

REFER TO THE IMAGE FOR THE ANSWER.

NOTE:

1) Allotment without Premium is @20 per share ( @25 - @5premium).

2) Call-in-Arrear on final call is on 500 Shares @ 10 per share i.e. 5,000.