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A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ?
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A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The fina...
Journal Entries for Forfeiture and Reissue of Shares
Forfeiture of Shares
When the shares are forfeited, it means that the shareholder has failed to pay the due amount. In such a case, the company cancels the shares and forfeits the amount already paid by the shareholder. The journal entries for the forfeiture of shares are:
1. When the shares are issued at a discount:
Bank Account Dr. 9,000
Discount on Issue of Shares Account Dr. 1,000
Share Capital Account Cr. 10,000
2. When Y fails to pay the final call:
Shareholder's Account Dr. 300
Calls in Arrears Account Cr. 300
3. When Y's shares are forfeited:
Calls in Arrears Account Dr. 300
Shareholder's Account Cr. 300
4. When the forfeited shares are cancelled:
Forfeited Shares Account Dr. 1,000
Share Capital Account Cr. 1,000
Reissue of Shares
When the forfeited shares are reissued, the company can sell them to new shareholders. The journal entries for the reissue of shares are:
1. When half of the forfeited shares are reissued at Rs 8 per share:
Bank Account Dr. 400
Forfeited Shares Account Cr. 400
2. When the reissued shares are fully paid:
Share Capital Account Dr. 500
Forfeited Shares Account Cr. 500
Explanation
The above journal entries show the various transactions involved in the forfeiture and reissue of shares. When the shares are issued at a discount, the company creates a Discount on Issue of Shares Account to record the discount amount. When Y fails to pay the final call, the Calls in Arrears Account is used to record the unpaid amount. When Y's shares are forfeited, the Calls in Arrears Account is debited and the Shareholder's Account is credited.
When the forfeited shares are cancelled, the Forfeited Shares Account is debited and the Share Capital Account is credited. When the reissued shares are sold, the Bank Account is debited and the Forfeited Shares Account is credited. When the reissued shares are fully paid, the Share Capital Account is debited and the Forfeited Shares Account is credited.
In summary, the journal entries for the forfeiture and reissue of shares help to keep track of the various transactions involved in these processes. They provide a clear picture of the company's financial position and help in making informed decisions.
Forfeiture of Shares
When the shares are forfeited, it means that the shareholder has failed to pay the due amount. In such a case, the company cancels the shares and forfeits the amount already paid by the shareholder. The journal entries for the forfeiture of shares are:
1. When the shares are issued at a discount:
Bank Account Dr. 9,000
Discount on Issue of Shares Account Dr. 1,000
Share Capital Account Cr. 10,000
2. When Y fails to pay the final call:
Shareholder's Account Dr. 300
Calls in Arrears Account Cr. 300
3. When Y's shares are forfeited:
Calls in Arrears Account Dr. 300
Shareholder's Account Cr. 300
4. When the forfeited shares are cancelled:
Forfeited Shares Account Dr. 1,000
Share Capital Account Cr. 1,000
Reissue of Shares
When the forfeited shares are reissued, the company can sell them to new shareholders. The journal entries for the reissue of shares are:
1. When half of the forfeited shares are reissued at Rs 8 per share:
Bank Account Dr. 400
Forfeited Shares Account Cr. 400
2. When the reissued shares are fully paid:
Share Capital Account Dr. 500
Forfeited Shares Account Cr. 500
Explanation
The above journal entries show the various transactions involved in the forfeiture and reissue of shares. When the shares are issued at a discount, the company creates a Discount on Issue of Shares Account to record the discount amount. When Y fails to pay the final call, the Calls in Arrears Account is used to record the unpaid amount. When Y's shares are forfeited, the Calls in Arrears Account is debited and the Shareholder's Account is credited.
When the forfeited shares are cancelled, the Forfeited Shares Account is debited and the Share Capital Account is credited. When the reissued shares are sold, the Bank Account is debited and the Forfeited Shares Account is credited. When the reissued shares are fully paid, the Share Capital Account is debited and the Forfeited Shares Account is credited.
In summary, the journal entries for the forfeiture and reissue of shares help to keep track of the various transactions involved in these processes. They provide a clear picture of the company's financial position and help in making informed decisions.
Community Answer
A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The fina...
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A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ?
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A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ?.
A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ?.
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A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ?, a detailed solution for A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ? has been provided alongside types of A ltd. issued 1000 shares of rs 10 each at a discount of 10%. The final call of rs 3 was not paid by Y who holds 100 shares and his shares were forfeited. Half of the forfeited shares were reissued at Rs 8 per share fully paid. Make journal enteries for the forfeiture and reissue of share ? theory, EduRev gives you an
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