A share having a face value of Rs.12, on which Rs. 10 is called-up and Rs. 8 is paid, is forfeited. State the amount with which the Share Capital account will be debited.

10

The correct answer is Option (2) → 10

• The face value of the share is ₹12, but only ₹10 has been called-up.

• When a share is forfeited, the Share Capital Account is debited with the called-up amount, not the face value or paid-up amount.

• Therefore, in this case, the debit to Share Capital A/c = ₹10.

• The journal entry for forfeiture is:

  $$\text{Share Capital A/c}\text{ Dr. (With called-up amount)}$$
  $$\text{ To Share Forfeited A/c }\text{Cr. (With amount received)}$$
  $$\text{ To Calls-in-Arrears A/c }\text{Cr. (With unpaid amount)}$$