Hindustan Steel Ltd. invited applications for 50,000 equity shares of ₹ 10 each at a premium of ₹ 4 per share. The amount was payable as follows On Application ₹ 4 (including premium ₹ 2)

Hindustan Steel Ltd. invited applications for 50,000 equity shares of ₹ 10 each at a premium of ₹ 4 per share. The amount was payable as follows:

On Application	₹ 4 (including premium ₹ 2)
On Allotment	₹ 6 (including premium ₹ 2)
On First and Final Call	Balance

Applications for 60,000 shares were received. Allotment was made to all the applicants on pro-rata basis. Excess application money was adjusted towards sums due on allotment. Ram to whom 500 shares were allotted, failed to pay allotment and call money. Shyam, to whom 1,000 shares were allotted, failed to pay the call money. These shares were forfeited. Out of the forfeited shares 1,200 shares (including all shares of Shyam) were re-issued at 10% discount as fully paid-up. Pass the necessary journal entries in the books of the company by opening ‘Calls in Arrears A/c’ wherever necessary. [Ans. Amount received on allotment ₹ 2,57,400; Balance of Share Forfeiture A/c transferred to Capita