A company issued for public subscription 40,000 equity shares of Rs.10 each at a premium of Rs.2 per share payable as under:
On Application Rs.2 per share
On Allotment Rs.5 per share (including Premium)
On First Call Rs.2 per share
On Final Call Rs.3 per share
Applications were received for 70,000 shares. Allotment was made in pro-rata to the applicants for 50,000 shares, the remaining applications being refused. Money overpaid on applications was applied towards sum due on allotment. A to whom 1500 shares were alloted , failed to pay the allotment and call money. B, who applied for 2500 shares failed to pay the two calls. The shares of A and B were subsequently forfeited after the second call was made. 3000 of the forfeited shares were reissued @ Rs.8 per share fully paid. The reissued shares included all of A's shares.
Pass journal entries in the books of the company to record the above transactions
In the books of …… Ltd. Journal Entry |
||||||
Date | Particulars | L.F. | Debit Amount Rs |
Credit Amount Rs |
||
Bank A/c (70,000×2) | Dr. | 1,40,000 | ||||
To Share Application A/c | 1,40,000 | |||||
(Money received for application) | ||||||
Share Application A/c | Dr. | 1,40,000 | ||||
To Share Capital A/c(40,000 × 2) | 80,000 | |||||
To Bank A/c (20,000 × 2) | 40,000 | |||||
To Share Allotment A/c (10,000 × 2) | 20,000 | |||||
(Amount of Application money to Share Capital) | ||||||
Share Allotment A/c | Dr. | 2,00,000 | ||||
To Share Capital A/c | 1,20,000 | |||||
To Securities Premium A/c | 80,000 | |||||
(Allotment money due) | ||||||
Bank A/c | Dr. | 1,73,250 | ||||
To Share Allotment A/c | 1,73,250 | |||||
(Money received on allotment) | ||||||
Share First Call A/c | Dr. | 80,000 | ||||
To Share Capital A/c | 80,000 | |||||
(Share first call due) | ||||||
Bank A/c | Dr. | 73,000 | ||||
To Share First Call A/c | 73,000 | |||||
(Share first call received) | ||||||
Share Final Call A/c | Dr. | 1,20,000 | ||||
To Share Capital A/c | 1,20,000 | |||||
(Share final call due) | ||||||
Bank A/c | Dr. | 1,09,500 | ||||
To Share Final Call A/c | 1,09,500 | |||||
(Share call money received except on 3,500 shares) | ||||||
Share Capital A/c | Dr. | 35,000 | ||||
Securities Premium A/c | Dr. | 3,000 | ||||
To Share Forfeiture A/c | 13,750* | |||||
To Calls in arrears A/c | 24,250 | |||||
(3,500 shares forfeited) | ||||||
Bank A/c (3,000×8) | Dr. | 24,000 | ||||
Shares Forfeiture A/c | 6,000 | |||||
To Share Capital A/c (3,000×10) | 30,000 | |||||
(Forfeited shares re-issued) | ||||||
Share Forfeiture A/c | Dr. | 5,250 |
||||
To Capital Reserve A/c | 5,250 | |||||
Working Notes: