Question

TAG Ltd forfeited 400 shares of Rs 10 each issued at a premium of Rs 1 per share for the non-payment

of allotment of Rs 4 per share (including premium). The first and final call of Rs 3 per share has not been

made yet. 50% of forfeited shares were re-issued at Rs 8 per share fully paid-up. Pass necessary journal

entries for the forfeiture and re-issue of shares.​

Answer 1

Answer:

Share Capital A/C Dr 2800

Securities Premium A/C 400

To Share Allotment A/C 1600

To Share Forfeiture A/C 1600

Bank A/C Dr 1600

Share Forfeiture A/C Dr 400

To Share Capital A/C 2000

Share Forfeiture A/C Dr 400

To Capital Reserve A/C 400