Re-Issue of Forfeited Shares – At Par :

the forfeited shares can be re-issued at par. In such a case, the entire amount standing to the credit of Shares Forfeited Account for those shares would be treated as net gain and transferred to Capital Reserve Account.

 

JOURNAL ENTRIES

1. On re-issue of shares:

Bank                                                                                                                  Dr.                                                                     (with the amount received on reissue
To Share Capital A/c                                                                                                                                  i.e. no. of shares re-issued x amount
received per share.)

2. On transfer of Shares Forfeited Account to Capital Reserve Account:

Shares Forfeited A/c                                                                                     Dr.                                                                      (with the forfeited amount on shares
To Capital Reserve A/c                                                                                                                            re-issued.)