Question : A company forfeited the following shares:
200 shares of Rs. 10 each forfeited, called up Rs. 9 per share, paid up Rs. 7 per share. Journal entry for forfeiture will be:
Option 1: Share Capital Alc Dr 2,000
To Share Forfeiture A/c 200
To Calls in Arrears A/c 1,800
Option 2: Share Capital Alc Dr. 2000
To Share Forfeiture A/c 1,800
To Calls in Arrears A/c 200
Option 3: Share Capital A/c Dr 1,800
To Share Forfeiture A/c 1,400
To call in arrears A/c 400
Option 4: Share Capital A/c Dr 1,800
To Share Forfeiture A/c 400
To Calls in Arrears A/c 1,400
Correct Answer: Share Capital A/c Dr 1,800
To Share Forfeiture A/c 1,400
To call in arrears A/c 400
Solution : Answer = S hare Capital A/c Dr 1,800
To Share Forfeiture A/c 1,400
To call in arrears A/c 400
Share capital account will be debited by the number of shares X called up money and Share forfeited account credited by the number of shares X paid up and call in arrear is credited by unpaid amount.
Hence, the correct option is 3.
