Life machine tools Limited, issued 50,000 equity shares of Rs 10 each at Rs 12 per share, payable at to Rs 5 on application (including premium), Rs 4 on allotment and the balance on the first and final call.
Applications for 70,000 shares had been received. Of the cash received, Rs 40,000 was returned and Rs 60,000 was applied to the amount due on allotment, the balance of which was paid. All shareholders paid the call due, with the exception of one share holder of 500 shares. These shares were forfeited and reissued as fully paid at Rs 8 per share. Journalise the transactions.
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Books of Life machine tools Limited
Journal
| Date | Particulars | L.F | Amount (Dr.) | Amount (Cr.) | |
| Bank A/c | Dr. | 3,50,000 | |||
| To Equity Share Application A/c | 3,50,000 | ||||
| ( Money received for application on 70,000 shares @ Rs. 5 each ) | |||||
| Equity Share Application A/c | Dr. | 3,50,000 | |||
| To Share Capital A/c | 1,50,000 | ||||
| To Securities Premium A/c | 1,00,000 | ||||
| To Equity share Allotment A/c | 60,000 | ||||
| To Bank A/c | 40,000 | ||||
| ( Equity Share Application money transferred to Share Capital A/c and returned cash of Rs 40,000 shares and Rs.60,000 adjusted to allotment ) | |||||
| Equity Share Allotment A/c | Dr. | 2,00,000 | |||
| To Equity Share Capital A/c | 2,00,000 | ||||
| ( Allotment money due on 50,000 Shares @ Rs.4 per share ) | |||||
| Bank A/c | Dr. | 1,60,000 | |||
| To Equity Share Allotment A/c | 1,60,000 | ||||
| ( Being Allotment money received ) | |||||
| Equity Share First call A/c | Dr. | 1,50,000 | |||
| To Equity Share Capital A/c | 1,50,000 | ||||
| ( Share First call money due on 50,000 shares @ Rs 2 per each ) | |||||
| Bank A/c | Dr. | 1,48,500 | |||
| To Equity Share First call A/c | 1,48,500 | ||||
| ( Equity Share First call money received for 49,000 shares @ Rs.3 per share ) | |||||
| Share Capital A/c | Dr. | 5,000 | |||
| To First and Final call A/c | 1,500 | ||||
| To Share Forfeiture A/c | 3,500 | ||||
| ( 500 shares forfeited for non-payment of First and Final call ) | |||||
| Bank A/c | Dr. | 4,000 | |||
| Share forfeiture A/c | Dr. | 1,000 | |||
| To share capital A/c | 5,000 | ||||
| ( Reissued of forfeiture shares @ Rs 8 per share ) | |||||
| Share forfeiture A/c | Dr. | 2,500 | |||
| To Capital Reserve A/c | 2,500 | ||||
| (Profit on reissue of share transferred to Capital Reserve) | |||||