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Issue and Forfeiture of Shares — Part 2: Calls, Interest, Forfeiture, Reissue and Disclosure

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Lesson

Calls, interest, forfeiture, reissue and disclosure

Part 2 — calls in arrears and in advance with interest, forfeiture and reissue of shares, and the Schedule III balance sheet.

In this lesson you will

Record calls in arrears and calls in advance in separate accounts
Calculate and record interest on calls in arrears and in advance as the articles (or Table F) provide
Pass entries for forfeiture of shares issued at par or at a premium, and for their reissue
Show share capital, forfeited shares, calls in arrears and calls in advance under Schedule III Part I

Part 2 at a glance

Concept

Calls in arrears

Table on calls in arrears: unpaid call money is debited to a calls in arrears account; it is cleared when the money is received; the balance is money called up but not received and is deducted from subscribed capital in the note on share capital
Calls in arrears	Entry or rule
Call money not received on the due date	Calls in Arrears A/c Dr. (with Bank A/c Dr. for the rest) To Equity Share Call A/c
Arrears received later	Bank A/c Dr. To Calls in Arrears A/c
Nature	Debit balance: money called up but not received
Balance sheet	Deducted from subscribed capital in the Note on Share Capital

Concept

Calls in advance

Table on calls in advance: money received before a call is credited to a calls in advance account and adjusted when the call is made; the balance is owed to shareholders and is shown under other current liabilities
Calls in advance	Entry or rule
Money received before a call is made	Bank A/c Dr. To Calls in Advance A/c
Call made later	Calls in Advance A/c Dr. (with Bank A/c Dr. for the rest) To Equity Share Call A/c
Nature	Credit balance: owed to shareholders until the call is made
Balance sheet	Other Current Liabilities (with any interest accrued on it)