VXN Ltd. invited applications for issuing 50,000 equity shares of ₹ 10 each at a premium of ₹ 8 per share. The amount was payable as follows:
₹ 4 per share (including ₹ 2 premium)
₹ 6 per share (including ₹ 3 premium)
On First Call
₹ 5 per share (including ₹ 1 premium)
On Second and Final Call
The issue was fully subscribed. Gopal, a shareholder holding 200 shares, did not pay the allotment money and Madhav, a holder of 400 shares, paid his entire share money along with the allotment money. Gopal’s shares were immediately forfeited after allotment. Afterwards, the first call was made. Krishna, a holder of 100 shares, failed to pay the first call money and Girdhar, a holder of 300 shares, paid the second call money also along with the first call. Krishna’s shares were forfeited immediately after the first call. Second and final call was made afterwards and was duly received. All the forfeited shares were reissued at ₹ 9 per share fully paid-up.
Pass necessary Journal entries for the above transactions in the books of the company.
[Ans.: Amount Forfeited (after Allotment) – ₹ 400; Amount forfeited (after First Call) – ₹ 500; Amount transferred to Capital Reserve – ₹ 600; Money Received on Allotment – ₹ 3,02,000.]