Question

X Co. Ltd. invited applications for 20,000 of its Equity Shares of * 10 each at a premium of 2
per share, payable 3 on application, * 7 on allotment including premium and the balance on
first and final call.
Applications for 25,000 shares were received. It was decided : (a) to refuse allotment to the
applicants for 1.000 shares ; (b) to allot in full to applicants for 4,000 shares ; (c) to allot the
balance of the available shares pro-rata among the other applicants, and (d) to utilise excess
application moneys in part payment of allotment moneys.
Mr. X holding 200 shares to whom shares had been allotted on pro-rata basis failed to pay
the amount due on allotment and call and Mr. Y holding 100 shares to whom full allotment was
made failed to pay the amount due on call only. These shares were forfeited.
160 forfeited shares of Mr. X and 40 forfeited shares of Mr. Y were reissued at a discount of
1 per share to Mr. Z.
Show the necessary Journal Entries including cash in the books of X Co. Ltd.​

Answer 1

option c is the right answer