Question

The Directors of Rock star Ltd. invited applications for \( 2,00,000 \) Shares of ₹ 10 each, issued at \( 20 \% \) premium. Share was payable as ₹ 5 on application, ₹ 4 (including premium) on allotment and balance on call. Public had applied for \( 3,20,000 \) shares out of which applications for 20,000 shares were reejected and remaining were allotted on pro-rata basis. Simba, an applicant of 15,000 shares failed to pay allotment and call money. His shares were forfeited and out of these 6,000 shares were reissued at a discount of \( ₹ 2 \) per share. Journalize.

Answer 1

Journal Entries in the Books of Rockstar Ltd.
Date	Particulars	L.F	Debit (₹)	Credit (₹)
i)	Bank A/c    ...Dr.		16,00,000
	To Share Application A/c			16,00,000
	(Being Application money received)
ii)	Share Application A/c    ...Dr.		16,00,000
	To Share Capital A/c			10,00,000
	To Share Allotment A/c			5,00,000
	To Bank A/c			1,00,000
	(Being Application money utilised)
iii)	Share Allotment A/c    ...Dr.		8,00,000
	To Share Capital A/c			4,00,000
	To Securities Premium A/c			4,00,000
	(Being allotment due with premium)
iv)	Bank A/c   ...Dr.		2,85,000
	Calls in Arrears A/c    ...Dr.		15,000
	To Share Allotment A/c			3,00,000
	(Being allotment received except of Simba)
v)	Share First and Final Call A/c    ...Dr.		6,00,000
	To Share Capital A/c			6,00,000
	(Being call money due)
vi)	Bank A/c    ...Dr.		5,70,000
	Calls in Arrears A/c    ...Dr.		30,000
	To Share First and Final Call A/c			6,00,000
vii)	Share Capital A/c     ...Dr.		1,00,000
	Securities Premium A/c    ...Dr.		15,000
	To Share Forfeited A/c			70,000
	To Calls in Arrears A/c			45,000
	(Being Simba’s shares forfeited)
viii)	Bank A/c    ...Dr		48,000
	Share Forfeited A/c     ...Dr.		12,000
	To Share Capital A/c			60,000
	(Being forfeited shares re-issued)
ix)	Share Forfeited A/c    ...Dr.		30,000
	To Capital Reserve A/c			30,000
	(Being gain on re-issue transferred to Capital Reserve)