Raunak Cotton Ltd. issued a prospectus inviting applications for 6,000 equity shares of Rs. 100 each at a premium of Rs.20 per shares, payable as follows:
On application Rs. 20
On allotment Rs. 50 (including premium)
On first call Rs.30 On final call Rs. 20
Applications were received for 10,000 shares and allotment was made pro-rata to the applicants of 8,000 shares, the remaining applications being refused. 2017 – Money -received in excess on the application was adjusted toward the amount due on allotment. Rohit to whom 300 shares were allotted failed to pay allotment and calls money, his shares were forfeited. Itika, who, applied for 600 shares, failed to pay the two calls and her shares were also forfeited. All these shares were sold to Kartika as fully paid for Rs.80 per share. Give journal entries in the books of the company.
