R.Ltd invited applications for 15,000 shares of ₹10 each at premium of ₹2 per share. The amount was payable as follows:
On Application ₹4
On allotment ₹5
On 1st call ₹2
On final call ₹1
Applications were received for 20,000 shares. The application of 2,000 shares was rejected. Mohan, who applied for 3,000 shares was allotted in full and prorata allotment was made to the remaining applicants. All money was fully received with the exception of the first call and final call on 3,000 shares held by Hari. These shares were forfeited and subsequently re-issued @ ₹8 per share.
On the basis of the above information answer the question.
Record the journal entry for forfeiture of shares.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Share Capital A/c Dr ₹30,000 To Share Ist call A/c ₹6,000 To Share final call A/c ₹3,000 To Share forfeiture A/c ₹21,000
On forfeiture, Share Capital is debited with the called-up amount, the unpaid calls are credited, and the amount already received (excluding premium) is credited to Share Forfeiture. The premium of ₹2 was collected with allotment, so the Securities Premium Reserve is not debited.
Called-up capital on Hari’s shares = 3,000 × ₹10 = ₹30,000 (Dr Share Capital)
First call unpaid = 3,000 × ₹2 = ₹6,000
Final call unpaid = 3,000 × ₹1 = ₹3,000
Capital already received = ₹4 + (₹5 − ₹2 premium) = ₹7 per share
Share Forfeiture = 3,000 × ₹7 = ₹21,000
NCERT (2026-27 edition): |