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.

Gain on reissue of forfeited shares is transferred to:

Capital Reserve A/c

The gain on reissue of forfeited shares is transferred to capital reserve. This is because the gain on reissue of forfeited shares is a capital gain for the company. It is not a revenue gain, and therefore it is not transferred to the profit and loss account. The capital reserve account is a reserve account that is used to record capital gains or losses that are not directly related to the company's core business activities.