High Light India Ltd. invited applications for 30,000 shares of ₹100 each at a premium of ₹ 20 per share payable as follows:

Applications were received for 40,000 shares and pro-rates allotment was made on the application for 35,000 share. Excess application money was utilised towards allotment.

Rohan to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited immediately after allotment.

Aman who applied for 1,050 shares failed to pay first call and his shares were forfeited immediately after first call.

Second and final call was made. All the money due on second call have been received.

Of the shares forfeited 1,000 shares were reissued as fully paid-up for 80 per share, which include the whole of Aman's shares.

Answer the question on the basis of the information given.

Which Account will be debited to record default on payment of any call?

Calls in Arrear

The correct answer is option 1- Calls in Arrears.

Calls in Arrear account specifically represents the unpaid portion of a call (amount shareholders owe for their shares) issued by a company. When a shareholder defaults on a call, the unpaid amount gets transferred to this account.