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A director of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3per share, for the non payment of the first call money of ₹2 per share. The final call of ₹2 per share has not been made. Half of forfeited share were reissued at ₹1500 as fully paid up. Journalise it.?
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< b="" />Journal Entry for Forfeiture and Reissue of Shares< />
1. Forfeiture of Shares:
When a shareholder fails to pay the call money on shares, the company has the right to forfeit those shares. In this case, the director forfeited 300 shares of ₹10 each with a premium of ₹3 per share for non-payment of the first call money of ₹2 per share. The journal entry for the forfeiture of shares is as follows:
Share Capital A/c Dr. 3,000
To Share Forfeiture A/c 3,000
Explanation:
- Share Capital A/c is debited with the nominal value of the forfeited shares, i.e., 300 shares × ₹10 each = ₹3,000.
- Share Forfeiture A/c is credited to record the forfeiture of shares.
2. Reissue of Shares:
The company can reissue the forfeited shares at a later date. In this case, half of the forfeited shares were reissued at ₹1500 as fully paid-up. The journal entry for the reissue of shares is as follows:
Bank A/c Dr. 1,500
To Share Capital A/c 1,500
Explanation:
- Bank A/c is debited with the amount received from the reissue of shares, i.e., ₹1,500.
- Share Capital A/c is credited to record the reissue of shares at their face value.
3. Additional Information:
- The final call of ₹2 per share has not been made, so no journal entry is required for it.
- The remaining half of the forfeited shares is not reissued, so no journal entry is required for them.
Summary:
The journal entry for the forfeiture of shares involves debiting Share Capital A/c and crediting Share Forfeiture A/c. The journal entry for the reissue of shares involves debiting Bank A/c and crediting Share Capital A/c. It is important to note that the final call of ₹2 per share has not been made, so no journal entry is required for it.
1. Forfeiture of Shares:
When a shareholder fails to pay the call money on shares, the company has the right to forfeit those shares. In this case, the director forfeited 300 shares of ₹10 each with a premium of ₹3 per share for non-payment of the first call money of ₹2 per share. The journal entry for the forfeiture of shares is as follows:
Share Capital A/c Dr. 3,000
To Share Forfeiture A/c 3,000
Explanation:
- Share Capital A/c is debited with the nominal value of the forfeited shares, i.e., 300 shares × ₹10 each = ₹3,000.
- Share Forfeiture A/c is credited to record the forfeiture of shares.
2. Reissue of Shares:
The company can reissue the forfeited shares at a later date. In this case, half of the forfeited shares were reissued at ₹1500 as fully paid-up. The journal entry for the reissue of shares is as follows:
Bank A/c Dr. 1,500
To Share Capital A/c 1,500
Explanation:
- Bank A/c is debited with the amount received from the reissue of shares, i.e., ₹1,500.
- Share Capital A/c is credited to record the reissue of shares at their face value.
3. Additional Information:
- The final call of ₹2 per share has not been made, so no journal entry is required for it.
- The remaining half of the forfeited shares is not reissued, so no journal entry is required for them.
Summary:
The journal entry for the forfeiture of shares involves debiting Share Capital A/c and crediting Share Forfeiture A/c. The journal entry for the reissue of shares involves debiting Bank A/c and crediting Share Capital A/c. It is important to note that the final call of ₹2 per share has not been made, so no journal entry is required for it.
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A director of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3per share, for the non payment of the first call money of ₹2 per share. The final call of ₹2 per share has not been made. Half of forfeited share were reissued at ₹1500 as fully paid up. Journalise it.?
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A director of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3per share, for the non payment of the first call money of ₹2 per share. The final call of ₹2 per share has not been made. Half of forfeited share were reissued at ₹1500 as fully paid up. Journalise it.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A director of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3per share, for the non payment of the first call money of ₹2 per share. The final call of ₹2 per share has not been made. Half of forfeited share were reissued at ₹1500 as fully paid up. Journalise it.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A director of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3per share, for the non payment of the first call money of ₹2 per share. The final call of ₹2 per share has not been made. Half of forfeited share were reissued at ₹1500 as fully paid up. Journalise it.?.
A director of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3per share, for the non payment of the first call money of ₹2 per share. The final call of ₹2 per share has not been made. Half of forfeited share were reissued at ₹1500 as fully paid up. Journalise it.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A director of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3per share, for the non payment of the first call money of ₹2 per share. The final call of ₹2 per share has not been made. Half of forfeited share were reissued at ₹1500 as fully paid up. Journalise it.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A director of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3per share, for the non payment of the first call money of ₹2 per share. The final call of ₹2 per share has not been made. Half of forfeited share were reissued at ₹1500 as fully paid up. Journalise it.?.
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