Ganesh Cotton Mills Ltd. forfeited 1,200 shares of ₹10 each (which were issued on 80% Pro-rata basis) for non-payment of allotment money @ ₹6 (including premium ₹3.50) and first call money @ ₹3 per share. Out of 1,200 fo

Journal Entries in the Books of Ganesh Cotton Mills Ltd. Date Particulars L.F. Debit (₹) Credit (₹) Share Capital A/c Dr. 12000 Securities Premium A/c Dr. 4200 To Share Allotment A/c 5850 To Share First Call A/c 3600 To Forfeited Shares A/c 6750 (Being 1200 shares forfeited due to non-payment of allotment and I call money) Bank A/c Dr. 8000 Shares Forfeited A/c Dr. 2000 To Share Capital A/c 10000 (Being Re-issue of 1000 shares at Discount) Shares Forfeited A/c Dr. 3625 To Capital Reserve A/c 3625 (Being Proportionate balance transferred to Capital Reserve A/c) Working Note Per Share Application money = (₹10 + ₹3.50) - (₹6 + ₹3) ₹4.50 No. of share Applied x 80/100 = 1200, therefore No. of share applied by shareholders = 1500 Overpaid application money per share = (1500-1200) x 4.50 / 1200 = ₹1125 Which is less than the amount of per share premium ₹3.50. Hence, it is assumed that share premium is not received.