Accounting: Reissue of Forfeited Shares: At Par, Premium and Discount, Originally Issued at Discount (For CBSE, ICSE, IAS, NET, NRA 2022)

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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 ₹ 20 each at a discount of ₹ 2 per share. Mahima holding 100 shares did not pay final call of ₹ 5 per share. Her shares were forfeited. Later on, the company reissued 100 shares of these forfeited shares at (I) ₹ 15 per share (II) ₹ 20 per share, and (III) ₹ 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 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 ₹ 50 each on which only application money of ₹ 10 per share and ₹ 20 on allotment were received. Final call of the ₹ 20 per share is not received. 300 of these shares are reissued at ₹ 40 per share. Make journal entries for forfeiture and Reissue of shares.


Journal Entries

Table of Journal Entries
S. No.ParticularsL. FAmount (₹)
1.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)



2.Bank A/c Dr.

Shares Forfeited A/c Dr.

To Share Capital A/c.

(Reissue of 300 shares)



3.Share Forfeited A/c Dr.

To Capital Reserve A/c

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


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