At the time of forfeiture of shares, Share Capital Account is debited with:
Share forfeiture occurs when a shareholder fails to pay allotment or call money. The company cancels the shares and passes the forfeiture entry.
The journal entry for forfeiture is:
Share Capital A/c Dr.
To Share Forfeiture A/c
To Calls in Arrears A/c
The Share Capital Account is debited with the total called-up amount because the company is cancelling the capital that was previously called from shareholders.
It is not debited with the paid-up amount or unpaid amount separately.
Answer: Option (B) Called-up amount on forfeited shares