Mithu Ltd. forfeited 1,000 equity shares of ₹10 each, which were originally issued at a premium of 20 percent to Guna. On these shares ₹9 per share called up (other than premium). Guna failed to pay allotment money ₹5 (i

Journal Entries in the Books of Mithu Limited Date Particulars L.F. Amount (Dr.) Amount (Cr.) Equity Share Capital A/c Dr. 9000 Securities Premium A/c Dr. 2000 To Equity Share allotment A/c 5000 To Equity Share First Call A/c 2000 To Shares Forfeited A/c 4000 (Being 1000 Equity Shares Forfeited) Bank A/c Dr. 5600 Shares Forfeited A/c Dr. 1400 To Equity Share Capital A/c 7000 (Being 700 Forfeited shares re-issued at discount of ₹2 per share) Share Forfeited A/c Dr. 1400 To Capital Reserve A/c 1400 (Being Balance amount forfeited on 700 re-issued shares transferred to capital reserve) Note: Amount transferred to Capital Reserve Amount forfeited on 700 Shares = 4000/1000 * 700 = ₹2800 Less: Discount on Re-Issue = 700 * 2 = ₹1400 Balance amount transferred to capital reserve = ₹1400