Suzuki Limited issued a prospectus inviting applications for 60,000 shares of ₹ 10 each at a premium of 30% payable as follows: On Application ₹ 3.50

Suzuki Limited issued a prospectus inviting applications for 60,000 shares of ₹ 10 each at a premium of 30% payable as follows: On Application ₹ 3.50; On Allotment ₹ 5.50 (including premium) : On First Call ₹ 2 and on Second Call ₹ 2.

Applications were received for 95,000 shares and allotment was made pro-rata to applicants of 80,000 shares. Money over-paid on applications were employed on account of sums due on allotment.

X, to whom 1,500 shares were allotted failed to pay the allotment money and on his subsequent failure to pay the first call his shares were forfeited. Y, the holder of 2,400 shares failed to pay the two calls and his share were forfeited after the Second Call. Of the shares forfeited, 3,000 shares were sold to Z as fully paid, Z paying ₹ 8.50 per share, the whole of Y’s share being included.

Give journal entries and prepare Bank Account.

[Ans. Cash received on allotment ₹ 2,53,500; Capital Reserve ₹ 12,700; Cash at Bank ₹ 7,83,400.]