Accounting: Reissue of Forfeited Shares: At Par, Premium and Discount, Originally Issued at Discount

Get unlimited access to the best preparation resource for IAS/Mains/Optional Commerce-Accountancy: Get detailed illustrated notes covering entire syllabus: point-by-point for high retention.

Download PDF of This Page (Size: 99K)

If shares originally issued at discount, the discount allowed was written back at the time of their forfeiture is again allowed. Thus, Discount A/c is credited by the amount of discount allowed at the time of issue. When the same shares are reissued, discount on issue of

shares A/c is again debited by the original amount of discount.


India infrastructure Ltd. has issued its shares of Rs. 20 each at a discount of Rs 2 per share. Mahima holding 100 shares did not pay final call of Rs 5 per share. Her shares were forfeited. Later on, the company reissued 100 shares of these forfeited shares at (I) Rs. 15 per share (II) Rs. 20 per share, and (III) Rs. 25 per share Make journal entries for the forfeiture and reissue of the shares in the books of company.


Reissue of Forfeited Shares At Par, Premium And Discount

Reissue of Forfeited Shares at Par, Premium and Discount

Reissue of Forfeited Shares At Par, Premium And Discount

Reissue of a Part of the Forfeited Shares

Sometimes all the forfeited shares will not be reissued. Only part of the shares will be reissued, and the reaming shares will be cancelled.

Example: A company forfeited 400 shares of Rs 50 each on which only application money of Rs 10 per share and Rs 20 on allotment were received. Final call of the Rs 20 per share is not received. 300 of these shares are reissued at Rs 40 per share. Make journal entries for forfeiture and Reissue of shares.


Journal Entries

Table of Journal Entries
Title: Table of Journal Entries

S. No.



Amount (Rs.)




Share Capital A/c Dr.

To Share Forfeited A/c

To Share First & Final Call A/c

(Forfeiture of 400 shares for non-payment on call)





Bank A/c Dr.

Shares Forfeited A/c Dr.

To Share Capital A/c.

(Reissue of 300 shares)





Share Forfeited A/c Dr.

To Capital Reserve A/c

(Balance of forfeited A/c of 300 shares transferred to capital Reserve A/c)



Developed by: