Practicing Success
If a share of ₹10 issued at a premium of ₹3, on which the full amount has been called and ₹8 has been paid on it (including premium), is forfeited, then the share capital is debited with: |
₹8 ₹5 ₹10 ₹13 |
₹10 |
The correct answer is Option (3) - ₹10. If premium is called by the company and paid by the shareholder then there is no need to debit the premium amount at the time of forfeiture of shares. And full amount is called up by the company so share capital account will be debited with the full amount i.e. ₹10. |