When shares issued at a premium are forfeited and then reissued, the amount of the original premium received is *not* forfeited; it remains in the Securities Premium Account. Upon reissue, the discount, if any, is debited first to the Forfeited Shares Account and any balance from that account is then transferred to Capital Reserve. Many students mistakenly believe the entire premium is lost upon forfeiture, but the accounts tell a different story. This precision, much like the alignment of my typewriter's letters, reveals the true character of the transaction, hai na?
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