Class 12 Accountancy Notes · GSEB

Journal Lab — Reissue & Capital Reserve

Journal Lab — Reissue & Capital Reserve — Build reissue and capital-reserve entries live with the per-share method. GSEB Class 12 Commerce Accountancy notes with all board sums.

Last updated: 29 Sep 2026

Notes

Reissue Rules and the Three Entries

Directors have full authority to reissue forfeited shares — at par, at premium, or at discount.

On reissue the company must receive at least the amount NOT received on capital account → maximum discount on reissue = amount forfeited on capital account (paid ₹ 7 of ₹ 10 → max discount ₹ 7). No separate sanction needed for that discount.

Amount received → Bank A/c Dr; discount given → Share forfeiture A/c Dr; face value restored → To Share capital A/c.

The three entry shapes — identical except for one extra line each way
Mode	Journal entry
Reissue at par	Bank A/c Dr (n × price) To Share capital A/c (n × face)
Reissue at premium	Bank A/c Dr (n × price) To Share capital A/c (n × face) To Securities premium A/c (n × premium)
Reissue at discount	Bank A/c Dr (n × price) Share forfeiture A/c Dr (n × discount) To Share capital A/c (n × face)

Which rupee goes where

The Bank line is shares × reissue price; the Share capital line is always shares × face value; the balancing figure (the discount) hits Share forfeiture — never Share capital.

ReissueReserveFlow — pick a mode, both panels follow

ReissueReserveFlow — mode → live entry → capital reserve

Recall the forfeiture position

500 shares × ₹ 7 credit = ₹ 3,500 sitting in Share forfeiture.

Reissue entry

Dr Bank A/c ₹ 4,000 [500 × ₹ 8 = ₹ 4,000] Dr Share forfeiture A/c ₹ 1,000 [500 × ₹ 2 = ₹ 1,000] Cr To Share capital A/c ₹ 5,000 [500 × ₹ 10 = ₹ 5,000]

Proportionate credit available on the reissued shares

500 × ₹ 7 = ₹ 3,500 — only this much of the forfeiture balance is allowed to move.

Capital reserve transfer

₹ 3,500 − ₹ 1,000 = ₹ 2,500 → Dr Share forfeiture / To Capital reserve.

Leftover balance

Share forfeiture A/c is closed — nothing is left behind.

Entry 1 — reissue of 500 share(s)

Dr = Cr ✓

Bank A/c

500 × ₹ 8 = ₹ 4,000

₹ 4,000

Share forfeiture A/c

500 × ₹ 2 = ₹ 1,000

₹ 1,000

To Share capital A/c

500 × ₹ 10 = ₹ 5,000

₹ 5,000

Entry 2 — transfer to Capital Reserve

Dr = Cr ✓

Share forfeiture A/c

500 × ₹ 7 = ₹ 3,500 − 500 × ₹ 2 = ₹ 1,000

₹ 2,500

To Capital reserve A/c

proportionate balance of 500 reissued share(s)

₹ 2,500

₹ 3,500 − ₹ 1,000 = ₹ 2,500

₹ 1,000

₹ 2,500

still in Share forfeiture ₹ 0 discount used ₹ 1,000 to Capital Reserve ₹ 2,500

Share forfeiture A/c closed ✓ — every forfeited share has been reissued.

Capital Reserve only ever receives the proportionate balance of reissued shares

The green bucket fills with ₹ 3,500 at forfeiture. Reissue drains the rose slice (discount) and empties only the reissued proportion into the violet Capital Reserve vault — only the reissued proportion moves. The rest waits.

Transferring the Forfeiture Balance to Capital Reserve

⭐ Why it moves at all

Forfeiture profit is a capital profit, not day-to-day business income. After the reissue, whatever is left of the Share forfeiture credit for those shares transfers to Capital Reserve A/c.

Full reissue

Capital Reserve = (shares × forfeiture credit/share) − (shares × discount/share)

All forfeited shares reissued

Partial reissue (proportionate)

Capital Reserve = (reissued shares × forfeiture credit/share) − (reissued shares × discount/share)

ONLY the reissued proportion moves; the balance stays on un-reissued shares

Leftover balance

Remaining forfeiture credit = (unreissued shares × forfeiture credit/share)

Continues in Share forfeiture; added to paid-up capital in the notes until reissued

I — until reissued

The forfeiture balance is added to paid-up capital under subscribed share capital in the notes.

II — proportionate only

Illustration 10(C): ₹ 8,400 credit on 1,200 shares → 800 reissued → 5,600 proportionate − 4,000 discount = ₹ 1,600 to Capital Reserve; ₹ 2,800 stays on 400 shares.

III — no waiting period

Forfeited shares can be reissued immediately after forfeiture.

Worked — Illustration 10 (A)–(E)

Solved Example

Problem

(A) 500 shares forfeited (paid ₹ 7, unpaid ₹ 3); reissued at ₹ 8.

Solution

Bank 4,000 (500×8) · Share forfeiture Dr 1,000 (500×2) · To Share capital 5,000 Capital Reserve = 3,500 − 1,000 = ₹ 2,500

Solved Example

Problem

(B) 350 shares (paid ₹ 5, unpaid ₹ 5); reissued at ₹ 7.

Solution

Bank 2,450 · Share forfeiture Dr 1,050 (350×3) · To Share capital 3,500 Capital Reserve = 1,750 − 1,050 = ₹ 700

Solved Example

Problem

Solution

Bank 4,000 (800×5) · Share forfeiture Dr 4,000 (800×5) · To Share capital 8,000 Capital Reserve = 5,600 − 4,000 = ₹ 1,600 (proportionate; ₹ 2,800 stays on 400 shares)

Solved Example

Problem

(D) 700 shares forfeited with premium unpaid (Dr capital 7,000 + Dr premium 35,000; To forfeiture 2,100, To allotment 37,800, To call 2,100); 500 reissued at ₹ 35 including premium ₹ 25.

Solution

Bank 17,500 · To Share capital 5,000 · To Securities premium 12,500 Capital Reserve = 500 × ₹ 3 = ₹ 1,500

Solved Example

Problem

(E) 2,000 shares (paid ₹ 5); two-stage reissue — 1,200 at ₹ 8, then the balance 800 at ₹ 7.

Solution

Stage 1: Capital Reserve 1,200 × (5 − 0) ... at ₹ 8 the discount is ₹ 2 → CR 1,200 × (5 − 2) = ₹ 3,600 Stage 2: balance 800 at ₹ 7 → discount ₹ 3 → CR 800 × (5 − 3) = ₹ 1,600 — two separate transfers

What your MCQ tests here

MCQ 8 = balance of share forfeiture (all reissued) → Capital Reserve A/c (c).

Interactive Journal Lab — Reissue & Reserve

Enter the forfeiture data and the reissue terms — the page builds the reissue entry and the proportionate capital reserve transfer, every line as shares × ₹ per share.

Journal Lab: Reissue & Capital Reserve

Work through the five steps in order — they are the exam write-up.

Worked Board Sums

Type — Reissue & Capital Reserve: Board Sums

11 problems

Full cycle (forfeit → reissue → transfer)

Illustration 10 (A)–(E): reissue at ₹ 8 (discount ₹ 2), at ₹ 7 (discount ₹ 3), partial 800 of 1,200 at a ₹ 5 discount, premium reissue at ₹ 35 (incl. premium ₹ 25), and a two-stage reissue of 2,000 shares.Capital Reserve respectively: 2,500 · 700 · 1,600 · 1,500 · 3,600 + 1,600

The first four are Lab presets — click each and read the violet vault figure.

Naznin Textiles (continued): 10,000 forfeited shares reissued at ₹ 7.50 as fully paid; prepare the Share forfeiture account too.Reissue: Bank 75,000 (10,000×7.5), Share forfeiture Dr 25,000 (10,000×2.5), To Share capital 1,00,000. Transfer: 48,000 − 25,000 = ₹ 23,000 to Capital Reserve. Forfeiture A/c totals 48,000 / 48,000.

A Ltd (continued): all 3,600 forfeited shares (credit ₹ 20,400) reissued at ₹ 8.Bank 28,800 (3,600×8), Share forfeiture Dr 7,200 (3,600×2), To Share capital 36,000; CR = 20,400 − 7,200 = ₹ 13,200

Bhadresh Diamond (continued): Daxa’s 600 forfeited shares (credit ₹ 8 per share) reissued fully paid at ₹ 9.Bank 5,400, Share forfeiture Dr 600, To Share capital 6,000; CR = 4,800 − 600 = ₹ 4,200

Board exercise sums (forfeiture + reissue + transfer)

(i) 800 shares × ₹ 10 forfeited — paid ₹ 3 application, unpaid allotment ₹ 4 + call ₹ 3; reissued at ₹ 8. (ii) R.K. Company: 600 shares of Sunil (paid ₹ 5, unpaid ₹ 3 + ₹ 2); 400 reissued at ₹ 6. (iii) 3,000 shares paid application ₹ 13 (incl. premium ₹ 10) + allotment ₹ 13 (incl. premium ₹ 10); unpaid call ₹ 4; reissued at ₹ 7.(iii) premium WAS received on application and allotment — build the forfeiture credit per share carefully before reissuing.

Solve each through the Lab — the credit per share differs in all three.

(i) Katara 1,200 shares × ₹ 10 — unpaid allotment ₹ 14 (incl. premium ₹ 10) + first and final call ₹ 3; reissued at the MAXIMUM permissible discount to Kanu. (ii) Ramesh 600 shares — paid ₹ 3 + ₹ 2.50, unpaid first call ₹ 2 (forfeit before final call); reissued at a ₹ 4 discount. (iii) 400 shares of ₹ 100 at 20% premium; ₹ 80 (incl. premium) called; unpaid allotment ₹ 50 (incl. premium) — forfeited before the first and final call; reissued for ₹ 36,000 fully paid.(i) max discount = forfeiture credit per share. (iii) reissue happens BEFORE further calls, so the called-up capital on reissue differs.

Raj Machine Ltd: 12,00,000 × ₹ 10 — ₹ 3 / ₹ 4 / ₹ 3; applications 14,70,000, excess rejected. Aakash (2,000) unpaid allotment and final; Sunny (1,200) unpaid final. All forfeited and all reissued at ₹ 7 fully paid.Combined forfeiture of defaulters at different stages → a single reissue batch.

Rustom Ltd (continued): Jahangir’s 2,000 shares reissued to Joshef at 40% premium (₹ 14) fully paid.

Dharam Metals (continued): Vipul’s 1,500 shares reissued before the final call at ₹ 5; Hema’s 500 shares reissued at the maximum permissible discount.

Siddhapur Isabgul (continued): Siddharaj’s 6,000 shares reissued at ₹ 7 to Minal; Jaysinh’s 4,000 at ₹ 6 to Rudra; prepare the Share forfeiture account as well.

Kapoor Media Ltd: 1,20,000 × ₹ 10 at premium ₹ 80; called in FOUR equal instalments (application, allotment, first, final). Applications 1,60,000, excess rejected. Shahid (4,000) unpaid first and final → forfeited; reissued to Ranbir at premium ₹ 70. Prepare the Securities premium account too.Reissue at a premium puts a violet Securities premium line in the reissue entry — and does not change the transfer.

Key Takeaways

Reissue: Bank (n × price) + Share forfeiture Dr (n × discount) → To Share capital (n × face), plus To Securities premium when reissued at a premium.
Maximum discount = forfeiture credit per share — never exceed it.
Capital Reserve = proportionate forfeiture credit of reissued shares − discount on those shares.
Partial reissue → only the reissued proportion transfers; the rest stays until reissued (and shows in the paid-up capital notes meanwhile).
The reissue price being below or above face never changes the Share capital line — it is always n × face value.
Two-stage reissues (Illustration 10E) mean two separate transfers, one per batch.