Issue, Forfeiture and Reissue of Share

Description

ISSUE, FORFEITURE AND REISSUE OF SHARE

Meaning of share

Issue price of Share:

1) At par

2) At premium

3) At discount

Share issued at Premium Contents

1. A capital nature profit for company.

2. Always credit at due.

3. No maximum limit.

4. Shown in the liability side of balance-sheet.

Share issued At Discount Contents

1. A capital nature loss for company.

2. Always debit at due.

3. Maximum limit = 10 percent of face value.

4. Deducted from security premium in liability side of balance sheet.

Prohibition on Issue of shares at a discount

Provision regarding issue of share in instalment

Journal Entries Regarding to issue of share in Installment

Calls in Arrear :

Loss for company.

1 Always debit at payment (compulsory).

2 If received in future then credit (optional).

3 Interest charged maximum at 10 percent Per annum.

4 Deducted out of paid-up capital.

5 Such type of shareholder don’t use voting power.

Entries of Interest on Calls in Arrear

Calls in Advance

Entries of Interest on Calls in Advance

Share Issue at security premium

Share Issued at discount

Issue Of Share For Consideration Other Than Cash :

(A) Issue of shares to vendor for asset purchase

(B) Issue of share on purchase of Existing Business

[C (i)] Being issue of shares to Promoters

[C (ii)] Being issue of share to Underwriter

Forfeiture of share

Journal Entry In The Case Of Forfeiture Of Share

Forfeiture Question

Re-issue Question

Partial Re-issue Question

PRO-RATA ALLOTMENT

Calculation of Amount of Calls in Arrear on allotment

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