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The Orient Company offered for public subscription 20,000 equity shares of Rs. 10 each at a premium of 10% payable as Rs. 2 on application, Rs. 4 on allotment (including premium), Rs. 3 on first call and Rs. 2 on second and final call. Applications for 26,000 shares were received. Applications for 4,000 shares were rejected. Pro-rata allotment was made to the remaining applicants. Both the calls were made and all the money was received except the final call on 500 shares which were forfeited. 300 of the forfeited shares were later on re-issued as fully paid up at Rs. 9 per share. Give journal entries. Or Arora Ltd issued a prospectus inviting applications for 20,000 shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows: On application Rs. 2, on allotment Rs. 5 (including premium), on first call Rs. 3, on second and final call Rs. 2. Applications were received for 30,000 shares and pro-rata allotment was made on the applications for 24,000 shares. Money overpaid on application was employed on account of sum due on allotment. Sanchit, to whom 400 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited. Parth, the holder of 600 shares, failed to pay the two calls and his shares were forfeited after the second call. Of the shares forfeited, 800 shares were sold to Siddharth credited as fully paid for Rs. 9 per share, the whole of Sanchit's shares being included. Show the journal entries.

Answer:

                                                                        JOURNAL

Date	Particulars		LF	Amt (Dr)	Amt (Cr)
	Bank A/c \[\left( 26,000\times 2 \right)\]	Dr		52,000
	To Equity Share Application A/c				52,000
	(Being share application money received for 26,000 shares @ Rs. 2 per Share)
	Equity Share Application A/c	Dr		52,000
	To Equity Share Capital A/c \[\left( 20,000\times 2 \right)\]				40,000
	To Equity Share Allotment A/c \[\left( 2,000\times 2 \right)\]				4,000
	To Bank A/c \[\left( 4,000\times 2 \right)\]				8,000
	(Being application money @ Rs 2 per share on 20,000 shares transferred to share capital account and money of 4,000 shares returned, remaining transferred to share allotment)
	Equity Share Allotment A/c	Dr		80,000
	To Equity Share Capital A/c \[\left( 20,000\times 3 \right)\]				60,000
	To Securities Premium Reserve A/c \[\left( 20,000\times 1 \right)\]				20,000
	(Being share allotment money due on 20,000 shares @ Rs.4 per share including Rs. 1 securities premium reserve)
	Bank A/c (80,000 - 4,000)	Dr		76,000
	To Equity Share Allotment A/c				76,000
	(Being share allotment money received for all the shares after adjustment of money transferred from share application)
	Equity Share First Call A/c	Dr		60,000
	To Equity Share Capital A/c \[\left( 20,000\times 3 \right)\]				60,000
	(Being share first call money due on 20,000 shares @ Rs. 3 per share)
	Bank A/c \[\left( 20,000\times 3 \right)\]	Dr		60,000
	To Equity Share First Call A/c				60,000
	(Being share first call received for 20,000 shares @ Rs. 3 per share)
	Equity Share Second and Final Call A/c	Dr		40,000
	To Equity Share Capital A/c \[\left( 20,000\times 2 \right)\]				40,000
	(Being share second and final call money due on 20,000 snares @ Rs. 2 per share)
	Bank A/c \[\left( 19,500\times 2 \right)\]	Dr		39,000
	To Equity Share Second and Final Call A/c				39,000
	(Being share second and final call money received for 19,500 shares @ Rs. 2 per share)
	Equity Share Capital A/c \[\left( 500\times 10 \right)\]	Dr		5,000
	To Equity Share Second and Final Call A/c \[\left( 55\times 2 \right)\]				1,000
	To Equity Share Forfeiture A/c \[\left( 500\times 8 \right)\]				4,000
	(Being 500 shares @ Rs. 10 per share fully called-up forfeited for non-payment of secondhand final call @ Rs. 2 per share)
	Bank A/c \[\left( 300\times 9 \right)\]	Dr		2,700
	Equity Share Forfeiture A/c \[\left( 300\times 1 \right)\]			300
	To Equity Share Capital A/c \[\left( 300\times 10 \right)\]				3,000
	(Being 300 shares @ Rs. 10 each re-issued for Rs. 9 per share fully paid-up)
	Equity Share Forfeiture A/c (WN)	Dr		2,100
	To Capital Reserve A/c				2,100
	(Being balance of 300 shares in share forfeiture account transferred to capital reserve account, after adjustment)

Working Note Calculation of Capital Reserve

Money transferred to share forfeiture account against forfeiture of 300 shares \[\left( 300\times 8 \right)\]	2,400
(-) Money adjusted on re-issue of 300 shares from forfeiture account \[\left( 300\times 1 \right)\]	(300)
Amount transferred to capital reserve account	Rs. 2,100

Or JOURNAL

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Date	Particulars		LF	Amt (Dr)	Amt (Cr)
	Bank A/c \[\left( 30,000\times 2 \right)\]	Dr		60,000
	To Share Application A/c				60,000
	(Being the application money received on 30,000 shares @ Rs. 2 per share)
	Share Application A/c \[\left( 30,000\times 2 \right)\]	Dr		60,000
	To Share Capital A/c \[\left( 20,000\times 2 \right)\]				40,000
	To Share Allotment A/c \[\left( 4,000\times 2 \right)\]				8,000
	To Bank A/c \[\left( 6,000\times 2 \right)\]				12,000
	(Being the application money adjusted and surplus refunded)
	Share Allotment A/c \[\left( 20,000\times 5 \right)\]	Dr		1,00,000
	To Share Capital A/c \[\left( 20,000\times 3 \right)\]				60,000
	To Securities Premium Reserve A/c \[\left( 20,000\times 2 \right)\]				40,000
	(Being the allotment due @ Rs. 5 on 20,000 share)
	Bank A/c (WN 2)	Dr		90,160
	To Share Allotment A/c				90,160
	(Being the receipt of allotment money less Sanchit shares)
	Share First Call A/c \[\left( 20,000\times 3 \right)\]	Dr		60,000