Forfeiture of Shares Issued at Par :

JOURNAL ENTRIES

1. Where the unpaid calls have already been transferred to Calls-in-Arrear A/c and the respective call accounts have been closed:

Share Capital A/c                                                                            Dr.                                         (with the amount of called up value of shares forfeited i.e. no. of
shares forfeited x the called up value per share. with the   amount
To Shares Forfeited A/c                                                                                                   already paid-up by the shareholders on the shares forfeited.)

To Calls-in-Arrear A/c                                                                                                   (with the amount of unpaid calls.)

OR

2. Where the unpaid calls have not been transferred to Calls-in-Arrear A/c and the respective call accounts are showing balances representing unpaid amounts:

Share Capital A/c                                                                          Dr.                                              (with the amount of called up value of shares forfeited i.e.,
no. of shares forfeited x the called up value per share.)
To Shares Forfeited A/c                                                                                           (with the amount already paid up by the shareholders on the shares                                                                                                                                                                       forfeited.)

To Share Allotment A/c                                                                                           (with the amount failed on allotment, if any.)
To Share First Call A/c                                                                                              (with the amount failed on first call, if any.)
To Share Final Call A/c                                                                                             (with the amount failed on final call, if any.)