In the Journal Entry of forfeiture of shares issued at a premium, the Share Capital Account is:-

Debited with the called up amount (excluding premium)

The correct answer is Option (4) → Debited with the called up amount (excluding premium)

When shares are forfeited, the primary objective is to reverse the incorrect credit that was originally given to the Share Capital Account.

• Share Capital Account: This account is always recorded (credited) with the face value of the shares when they are issued, and when forfeited, it is debited to cancel that amount. However, for a forfeited share, we only debit the portion that the company has called up from the shareholders up to the date of forfeiture. The Share Capital Account is never credited with the premium amount.

• Securities Premium Reserve Account: If the premium has been received by the company, this account remains untouched. If the premium has been called up but NOT received (i.e., the unpaid call money includes the premium), the Securities Premium Reserve Account (or Premium Account) is separately debited to cancel the contingent credit it received, as per the accounting standard.