Benolac Paints Ltd. invited application for issuing 1,20,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share. The amount was payable as follows:

On application – Rs. 3 per share (including premium Rs. 1)

On allotment – Rs. 3 per share.

On first and final call – Rs. 6 per share (including premium Rs. 1)

Applications for 1,40,000 shares were received. Applications for 10,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Over payments on application were adjusted towards sums due on allotment. All calls were made and were duly received except allotment and final call on 6,000 shares allotted to Sharvi. These shares were forfeited. Afterwards, half of the forfeited shares were re-issued for Rs. 33,000 as fully paid up.

Pass necessary journal entries for the above transactions in the books of Benolac Paints Ltd.

Marks-8, CBSE:2016-17/Comp-AI/Q-16*

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