(Issue of Shares at Par, Undersubscription).
Sarvottam Ltd. invited applications for 40,000 Equity Shares of Rs. 10 each. The amount was payable as follows: on application Rs. 3 per share, on allotment Rs. 4 per share and on first and final call Rs. 3 per share. Applications were received for 37,500 shares and allotment was made to all. Ashok to whom 1,000 shares were allotted failed to pay the allotment money and also first and final call. Sohan who had applied for 500 shares failed to pay the first and final call.
Pass necessary Journal entries to record the above transactions.

Explanation

`{:("Working Notes:",," Rs."),(1." Amount due on allotment",,"1,50,000"),(" Less: Allotment money not paid by Ashok(1,000"xx"Rs. 4)",," 4,000"),(" Amount received on allotment",,barul(ul(1,46,000))),(2." Amount due on first and final call",,"1,12,500"),(" Less: First call money not paid by Ashok and Sohan on 1,500 shares",,),(" (1,000+500)@Rs. 3 per share",," 4,500"),(" Amount received on first and final call",,barul(ul(1,08,000))):}`