question_answer

A Ltd. forfeited 1,000 shares of Rs.10 each, Rs.7 called up, issued at a premium of 20% (to be paid at the time of allotment) for non-payment of a allotment of Rs.4 per share. Journal entry for forfeiture of share will be (Calls in arrear account is not maintained):

A)

Share capital A/c	Dr.	7000
To Share forfeiture A/c			5000
To Share allotment A/c			2000

 

B)

Share capital A/c	Dr.	10,000
To Share forfeiture A/c			5,000
To Share allotment A/c			5,000

 

C)

Share capital A/c	Dr.	7,000
Securities Premium Reserve A/c	Dr.	2,000
To Share forfeiture A/c			5,000
To Share allotment A/c			4,000

 

D)

Share capital A/c	Dr.	12,000
Securities Premium Reserve A/c	Dr.	2,000
To Share forfeiture A/c			5,000
To Share allotment A/c			7,000