Page 182 - ISCDEBK-12

7.18 Double Entry Book Keeping (Section A)—ISC XII

Equity Shares Allotment A/c (80,000 × ` 5) ...Dr. 4,00,000
To Equity Share Capital A/c (80,000 × ` 2) 1,60,000
To Securities Premium Reserve A/c (80,000 × ` 3) 2,40,000
(Being the allotment money due on 80,000 shares @ ` 5 per share
including ` 3 being premium)

Bank A/c ...Dr. 4,07,000
Calls-in-Arrears A/c (1,000 × ` 5) ...Dr. 5,000
To Equity Shares Allotment A/c 4,00,000
To Calls-in-Advance A/c (2,000 × ` 6) 12,000
(Being the allotment money received on 79,000 shares and
Calls-in-Advance received on 2,000 shares, arrear on 1,000 shares
being transferred to Calls-in-Arrears Account)
Equity Shares First Call A/c (80,000 × ` 3) ...Dr. 2,40,000
To Equity Share Capital A/c 2,40,000
(Being the first call money of ` 3 per share due on 80,000 shares)
Bank A/c (77,000 × ` 3) ...Dr. 2,31,000
Calls-in-Advance A/c (2,000 × ` 3) ...Dr. 6,000
Calls-in-Arrears A/c (1,000 × ` 3) ...Dr. 3,000
To Equity Shares First Call A/c 2,40,000
(Being the first call money received on 77,000 shares and
Calls-in-Advance adjusted on 2,000 shares, arrear on 1,000 shares
being transferred to Calls-in-Arrears Account)

Equity Share Capital A/c (1,000 × ` 7) ...Dr. 7,000
Securities Premium Reserve A/c (1,000 × ` 3) ...Dr. 3,000
To Calls-in-Arrears A/c (` 5,000 + ` 3,000) 8,000
To Forfeited Shares A/c (1,000 × ` 2) 2,000
(Being the forfeiture of 1,000 shares for non-payment of
allotment and call money)

Bank A/c (800 × ` 11) ...Dr. 8,800
Forfeited Shares A/c (800 × ` 2) ...Dr. 1,600
To Equity Share Capital A/c (800 × ` 10) 8,000
To Securities Premium Reserve A/c (800 × ` 3) 2,400
(Being the reissue of 800 forfeited shares @ ` 11 each considered
as fully paid-up @ ` 13 each)

Note: There is no gain on reissue of the forfeited shares as shown below:
`

Amount forfeited on 800 shares (800 × ` 2) 1,600
Less: Applied towards reissue (800 × ` 2) 1,600
Nil
Therefore, nothing has been transferred to Capital Reserve.