Fortfeitured of shares (ISSUED AT DISCOUNT):--
Shares capital a/c____________________________dr with called up values
To shares Forfeiture a/c with amt. paid up
To shares allotment a/c with unpaid amt.
To shares unpaid calls a/c with unpaid amt.
To Discount on issue shares a/c with discount amt.
Note:- Student should note that when shares issued at discount, the discount of issue of shares a/c is debited. Therefore at the time of forfeiture of such shares, discount on issue of shares a/c is credited to cancel it.
PRO RATA OF SHARES:--The following table should be calculated for this:
| Catagry | Shares Applied | Shares Alloted | Excess Shares | Excess Money | Adjusted in Allotment | Bank or Refund |
REISSUE OF SHARES:--When the company Forfeiture the above calculated shares then the next step is to reissue that particular shares and that shares which were Not REISSUED are SHOWN in LIABILITIES side of B/S .The journal entry is.
Bank a/c____________________________dr with reissue amt.
Share forfeiture a/c____________________dr (B/F)
To sec.prem. a/c if issue with sec. prem.
Amount transfer to capital reserve:- After reissue of shares the next step is amt. transfer to capital reserve and this Is also shown in B/S.The journal is
Share Forfeiture a/c_______________________dr.
To Capital Reserve a/c
Calculations of amount transfer to capital reserve
