There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.

Assertion (A):  Forfeited shares may be reissued by the company at a discount but the amount of discount cannot be more than the amount forfeited on the reissued shares.
Reason (R):  It is the sale of shares and not an issue of shares. Thus, the company can reissue them at any price.

Assertion (A) is correct but the Reason (R) is not correct.

Forfeited shares may be reissued as fully paid at a par, premium, discount. In this context, it may be noted that the amount of discount allowed cannot exceed the amount that had been received on forfeited shares at the time of initial issue, and that the discount allowed on reissue of forfeited shares should be debited to the ‘Forfeited Share Account’. The balance, if any, left in the Share-Forfeited Account relating to reissued Shares, should be treated as capital profit and transferred to Capital Reserve Account.