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8.20 Double Entry Book Keeping—CBSE XII
Illustration 14.
Bharat Ltd. invited applications for 2,00,000 Equity Shares of ` 10 each. The amount was payable
as follows:
On application ` 3 per share, on allotment ` 5 per share, and on first and final call ` 2 per share.
Applications were received for 3,00,000 shares and pro rata allotment was made to all
the applicants.
Bajaj, who was allotted 3,000 shares failed to pay the allotment and call money. His shares
were forfeited. Out of the forfeited shares, 2,500 shares were reissued as fully paid-up
@ ` 8 per share.
Pass Journal entries to record the above transactions. (Delhi 2002 C)

Solution: In the Books of Bharat Ltd.
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)

Bank A/c ...Dr. 9,00,000
To Equity Shares Application A/c 9,00,000
(Application money received on 3,00,000 shares)
Equity Shares Application A/c ...Dr. 9,00,000
To Equity Share Capital A/c 6,00,000
To Equity Shares Allotment A/c 3,00,000
(Application money adjusted)
Equity Shares Allotment A/c ...Dr. 10,00,000
To Equity Share Capital A/c 10,00,000
(Allotment money due on 2,00,000 shares)
Bank A/c ...Dr. 6,89,500
To Equity Shares Allotment A/c 6,89,500
(Remaining allotment money received on 1,97,000 shares) (WN 2)
Equity Shares First and Final Call A/c ...Dr. 4,00,000
To Equity Share Capital A/c 4,00,000
(First and final call money due on 2,00,000 shares)
Bank A/c ...Dr. 3,94,000
To Equity Shares First and Final Call A/c 3,94,000
(First and final call money received on 1,97,000 shares @ ` 2 per share)
Equity Share Capital A/c ...Dr. 30,000
To Equity Shares Allotment A/c 10,500
To Equity Shares First and Final Call A/c 6,000
To Forfeited Shares A/c 13,500
(3,000 shares forfeited for non-payment of allotment and first
and final call) (WN 1)
Bank A/c ...Dr. 20,000
Forfeited Shares A/c ...Dr. 5,000
To Equity Share Capital A/c 25,000
(Reissue of 2,500 shares as fully paid-up @ ` 8 per share)
Forfeited Shares A/c ...Dr. 6,250
To Capital Reserve A/c 6,250
(Gain on 2,500 reissued shares transferred to Capital Reserve) (WN 3)