Question

XYZ Limited has an aAuthorised Capital of Rs. 4,00,000 divided into shares of Rs. 20 each, the whole of which is issued and subscribed at a premium of Rs. 2 per share. The amount was payable as follows : On Application and Allotment : Rs. 10 per share, On 1st Call Rs. 4 per share (including premium) and the balance as and when required. The company made both the calls. The application and allotment money was duly received. But a shareholder holding 2,00 shares failed to pay both the calls and his shares were forfeited. These shares were later re-issued at Rs. 14 per share as fully paid. Give journal entries regarding the above.

Answer 1

Capital Reserve Rs. 8,000.
Hint : In this question Rs. 10 has been called on application and allotment jointly, therefore, following entries will be passed for application and allotment :
`{:("Bank A/c Dr.","2,00,000",),(ul(" To Share Application & Allotment A/c "),," 2,00,000"),("Share Application & Allotment A/c Dr.","2,00,000",),(ul(" To Share Capital A/c "),," 2,00,000"):}`