**Journal Entry for Forfeiture of Shares and Reissue**

**1. Forfeiture of Shares by Reliance Ltd.**
When a shareholder fails to pay the allotment money and subsequent calls on shares, the company has the right to forfeit the shares. In this case, Reliance Ltd. forfeited 200 shares of Rs. 10 each fully called up and upheld by Mohan for the non-payment of allotment of Rs. 3 per share and the first and final call of Rs. 4 per share.

The journal entry for the forfeiture of shares is as follows:

**Share Forfeiture A/C** Dr. Rs. 2,000
To **Share Capital A/C** Rs. 2,000

(Being the forfeited shares transferred to Share Forfeiture Account)

**2. Reissue of Forfeited Shares to Y**
After the shares are forfeited, the company has the option to reissue them to new shareholders. In this case, the forfeited shares were reissued to Y for Rs. 8 per share.

The journal entry for the reissue of forfeited shares is as follows:

**Bank A/C** Dr. Rs. 1,600
**Share Forfeiture A/C** Dr. Rs. 400
To **Share Capital A/C** Rs. 2,000

(Being the forfeited shares reissued to Y at Rs. 8 per share)

**3. Reversal of Forfeiture Entries**
Since the shares are reissued, the forfeiture entries need to be reversed. The Share Forfeiture Account is closed by transferring the balance to the Share Capital Account.

The journal entry to reverse the forfeiture entries is as follows:

**Share Forfeiture A/C** Dr. Rs. 2,000
To **Share Capital A/C** Rs. 2,000

(Being the forfeiture entries reversed and the Share Forfeiture Account closed)

**Summary**
In summary, the journal entries for the forfeiture of shares and their subsequent reissue are as follows:

1. Forfeiture of Shares by Reliance Ltd.:
Share Forfeiture A/C Dr. Rs. 2,000
To Share Capital A/C Rs. 2,000

2. Reissue of Forfeited Shares to Y:
Bank A/C Dr. Rs. 1,600
Share Forfeiture A/C Dr. Rs. 400
To Share Capital A/C Rs. 2,000

3. Reversal of Forfeiture Entries:
Share Forfeiture A/C Dr. Rs. 2,000
To Share Capital A/C Rs. 2,000

These journal entries reflect the forfeiture of shares by Reliance Ltd., the reissuance of the forfeited shares to Y, and the reversal of the forfeiture entries.