Question

Neste Berhad has offered to public for subscription 30,000 ordinary shares of RM100 each payable as RM30 per share on application, RM30 per share on allotment, RM20 on the first call and RM20 on the second call. Applications were received for 40,000 shares and pro-rata allotment was made on the application for 35,000 shares. Excess application money was utilised towards allotment.
Albert to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited immediately after allotment.
Betty who applied for 1,050 shares failed to pay first call and her shares were forfeited immediately after first Call.

Second call was made. All the money due on second call have been received.
Of the shares forfeited, 1,000 share were reissued as fully paid-up for RM 80 per share, which included the whole of Betty’s shares.

Required:
Show the journal entries to record the issuance of shares. [30 marks]

Answer 1

Journal entries in the books of Neste Berhad

Date	Particulars	Lf	Amount	Amount
	Bank a/c----Dr to share application a/c (Being share application amount received)		1200000	1200000
	Share application a/c----Dr to bank a/c (Being shares rejected)		150000	150000
	Share application a/c----Dr to share allotment a/c (Being excess application money adjusted to allotment money)		150000	150000
	Share allotment a/c----Dr to share capital a/c (Being share allotment money due)		750000	750000
	Bank a/c----Dr to share allotment a/c (Being allotment money received)		732000	732000
	Calls in arrears a/c----Dr to share allotment a/c (Being arrears on allotment)		18000	18000
	Share capital a/c-----Dr to calls in arrears a/c to forfeited shares a/c (Being shares forfeited)		36000	18000 18000
	Share first call a/c-----Dr to share capital a/c (Being share first call due)		588000	588000
	Bank a/c-----Dr to share first call a/c (Being first call amount received)		567000	567000
	Calls in arrears a/c----Dr to share first call a/c (Being arrears on first call)		21000	21000
	Share capital a/c-----Dr to calls in arrears a/c to forfeited shares a/c (Being shares forfeited)		84000	21000 63000
	Share second call a/c----Dr to share capital a/c (Being second call money due)		567000	567000
	Bank a/c----Dr to share second call a/c (Being share second call money received)		567000	567000
	Bank a/c---Dr Forfeited shares a/c to share capital a/c to capital reserve a/c (Being forfeited shares reissued)		80000 60000	100000 40000