Question

XYZ Ltd. issued a prospectus inviting applications for 2,000 shares of Rs. 10 each at a premium of Rs. 4 per share,

payable as:

On Application Rs. 6 per share ( including Premium Re. 1 )

On Allotment Rs. 2 per share (including Premium Re. 1)

On First Call Rs. 3 per share (including Premium Re. 1 )

On Final call Rs. 3 per share (including Premium Re. 1 )

Applications were received for 3,000 shares and pro-rata allotment was made on the applications for 2,400 shares. It

was decided to utilize excess application money towards the amount due on allotment.

X, to whom 40 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first

call, his shares were forfeited.

Y, who applied for 72 shares failed to pay the two calls and on his failure, his shares were forfeited.

Of the shares forfeited, 80 shares were re-issued as fully credited for Rs. 9 per share. Pass necessary journal entries

to record the above transactions.

Answer 1

Bank a/c dr 18000
To es application a/c 18000
Es application a/c dr 18000
To es capital a/c 10000
To security premium reserve a/c 2000