X Ltd. issued 60,000 shares of Rs. 10 each a premium of 20% payable as follows :
On Application Rs. 5 (including premium), On Allotment Rs. 3, and On First and Final Call Rs. 4.
The company received applications for 75,000 shares and allotment was made as follows :
List I Applicants for 40,000 shares were allotted in full.
List II Applicants for 25,000 shares were allotted 20,000 shares.
List III Applicants for 10,000 shares were allotted Nil shares.
A shareholder to whom 200 shares were allotted under List I paid full amount due on shares alongwith allotment money. Another shareholder holding 600 shares failed to pay the amount due on call. His shares were forfeited and 500 of these shares were subsequently re-issued as fully paid @ Rs. 11 per share. Expenses of issue came to Rs. 20,000 which were fully written off against securities premium A/c. Pass journal entries in the books of the company.

Explanation

Note 5: Profit on the forfeiture of 600 shares is Rs 3,600 . Out of this amount, profit on the re-issue of 500 shares Rs 3,000 has been transferred to capital reserve. the balance of Rs 600 will be shown on the equity and liabiliies side of the balance sheet under the head 'Share Capital'.
Note (6). Student are advised to prepare Bank A/C in order to ascertain the balance of cash at bank.