AB Ltd. issued 1,000 Equity Shares of Rs 10 each at a premium of Rs 2 per share. The amount payable was Rs 4 on Application, Rs 5 on Allotment, and Rs 3 on the First and Final call. A person, X, to whom 100 shares were allotted, failed to pay allotment money and his shares were forfeited before making the first and final call. The amount debited in the Equity Share Capital Account at the time of forfeiture would be-

₹700

App. money + Allot money - Security premium (4+5-2) = 7 * 100 = 700 would be debited in Equity Share Capital Account at the time of Forfeiture of shares. When Security Premium is not received, Security Premium account is debited, while passing the forfeiture entry.

Entry of forfeiture will be-
Share Capital A/c                        Dr. ₹700
Securities premium reserve A/c Dr. ₹200
         To Share Allotment A/c                      ₹500
         To share Forfeiture A/c                      ₹400
(Forfeiture of shares on which final call not made)