SK Ltd. invited applications for issuing 3,20,000 equity shares of ₹ 10 each at a premium of ₹ 5 per share. The amount was payable as follows

SK Ltd. invited applications for issuing 3,20,000 equity shares of ₹ 10 each at a premium of ₹ 5 per share. The amount was payable as follows:

Applications for 4,00,000 shares were received. Applications for 40,000 shares were rejected and application money refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotments. Jeevan holding 800 shares failed to pay the allotment money and his shares were immediately forfeited. Afterwards final call was made. Ganesh who had applied for 2,700 shares failed to pay the final call. His shares were also forfeited. Out of the forfeited shares 1,500 shares were re-issued at ₹ 8 per share fully paid up. The re-issued shares included all the forfeited shares of Jeevan.

Assuming that the Company maintains ‘Calls in Arrears Account’ pass necessary Journal entries for the above transactions in the books of the company.

[Ans. Amount received on allotment ₹ 14,76,300; Balance of Share Forfeiture Account transferred to Capital Reserve ₹ 5,400 – ₹ 3,000k = ₹ 2,400.]