Hindustans Steel Ltd. invited applications for 50,000 equity shares of Rs. 10 each at a premium of Rs. 4 per share. The amount was payable as follows :
`{:("On Application","Rs. 4 (including premium Rs. 2)"),("On Allotment","Rs. 6 (including premium Rs. 2)"),("On First and Final Call","Balance"):}`
Applications for 60,000 shares were received. Allotment was made to all the applicants on pro-rata basis. Excess application money was adjusted towards sums due on allotment. Ram, to whom 500 shares were allotted, failed to pay allotment and call money. Shyam, to whom 1,000 shares were allotted, failed to pay the call money. These shares were forfeited. Out of the forfeited shares 1,200 shares (including all shares of Shyam) were re-issued at 10% discount as fully paid-up. Pass the necessary journl entries in the books of the company by opening 'Calls in Arrears A/c' wherever necessary.

Explanation

Amount received on allotment Rs. 2,57,400, Baslance of Share Forfeiture A/c transferred to Capital Reserve Rs. 560 +Rs. 6,000 - Rs. 1,200 = Rs. 5,360.
Hint : Entry for the forfeiture of shares :
`{:("Share Capital A/c","Dr. 15,000"),("Securities Premium Reserve A/c","Dr. 1,000"),(" To Calls in Arrear A/c"," 8,600"),(" To Share Forfeiture A/c"," 7,400"):}`