X ltd. forfeits 100 12%preference shares of rupees 25each,fully called up on which rupees 1500 have been received and reissues them as fully paid up to one of the directors upon payment of Rs 2300
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Answer:
In case of non- payment of any of the call money, the shares get forfeited. Later these shares can be sold at the called up value.
On issue of forfeited shares, the share capital account is debited with the called up value i.e 18,000 (2000*9).
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Explanation:
Share capital a/c Dr 2500
To forfeited shares. 1500
To calls in arrears 1000
Reissue:
Bank a/c. Dr. 2300
Forfeited shares a/c Dr. 200
To Share cap. 2500
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