Joy Entertainment Ltd. issued 200,000 shares of TZS500 each at a premium of TZS100 per
Share on January 2020. The amount was required to be paid as:
(i) TZS180 on application up to 31st March 2020.
(ii) The allotment was made in April and all the allotted being required paying for the
allotment monies TZS200 per share up to June 2020.
(iii) A first call was made on 1st September, TZS120 per shared being required to be
paid before 31st October, 2020.
(iv) A second and final call of TZS100 per share was made on 1st December, requiring
all shareholders to pay for the called amount before 31st December, 2020.
Applications were received for 280,000 shares. Applications for 30,000 shares were sent
letter of regret and their amount refunded in full. All the remaining applications were
accepted and allotment was made on prorate basis.
Suzan who was allotted 2,000 shares fail to pay the first call money. On her subsequent
failure of the second call her shares were forfeited.
Good luck also who had applied for 1,500 shares failed to pay the final call. His shares too
were forfeited.
All the forfeited shares were then re-issued at a discount of TZS20 per share.
Required: Record the above entries into the journal entries of Joy Entertainment
January 2020:
Cash A/C (200,000 x TZS180) Dr. 36,000,000
Share Capital A/C Cr. 36,000,000
(Being the amount received on application)
Share Capital A/C Dr. 40,000,000
Share Premium A/C Dr. 8,000,000
Share Allotment A/C (200,000 x TZS200) Cr. 48,000,000
(Being the allotment money received on shares)
April 2020:
Share Allotment A/C (30,000 x TZS200) Dr. 6,000,000
Share Capital A/C Dr. 4,000,000
Share Premium A/C Cr. 10,000,000
(Being the refund of shares and excess application money)
September 2020:
Share First Call A/C (200,000 x TZS120) Dr. 24,000,000
Share Capital A/C Cr. 24,000,000
(Being the first call money received)
December 2020:
Share Final Call A/C (200,000 x TZS100) Dr. 20,000,000
Share Capital A/C Cr. 20,000,000
(Being the final call money received)
Forfeiture of Suzan's shares:
Suzan's Share Capital A/C (2,000 shares) Dr. 2,000,000
Suzan's Share First Call A/C (2,000 x TZS120) Dr. 240,000
Share Capital Forfeiture A/C Cr. 2,240,000
(Being Suzan's shares forfeited)
Re-issuance of Suzan's forfeited shares:
Share Capital Forfeiture A/C Dr. 2,240,000
Share Capital A/C Cr. 2,240,000
(Being the forfeited shares re-issued at a discount of TZS20)
Forfeiture of Good luck's shares:
Good luck's Share Capital A/C (1,500 shares) Dr. 1,500,000
Good luck's Share Final Call A/C (1,500 x TZS100) Dr. 150,000
Share Capital Forfeiture A/C Cr. 1,650,000
(Being Good luck's shares forfeited)
Re-issuance of Good luck's forfeited shares:
Share Capital Forfeiture A/C Dr. 1,650,000
Share Capital A/C Cr. 1,650,000
(Being the forfeited shares re-issued at a discount of TZS20)