On 1 July 2017, Pine Ltd issued a prospectus inviting applications for 600 000 o

Question

On 1 July 2017, Pine Ltd issued a prospectus inviting applications for 600 000 ordinary shares, at an issue price of $7, payable $2.50 on application, $1.50 on allotment, and $3 on future call(s), dates to be determined by the directors. By 1 September, applications were received for 620 000 shares with $2.50 paid per share. On 6 September, the directors allotted 600 000 shares. Refunds were made to applicants for 20 000 shares. Share issue costs of $12 400 were also paid on the same date. All of the allotment money was received by 1 October. On 1 February 2018, a first and final call for $3 was made. All of the call money was received by 1 March 2018.

Required

Prepare journal entries to record the above transactions.

Explanation / Answer

sept 1 bank a/c..............dr 1550000

to equity share application a/c 1550000

equity share application a/c.................dr 50000   

to bank a/c 50000

(excess money refunded)

equity share application a/c...............dr 1500000

to equity share capital a/c 1500000

sept 6 equity share allotment a/c..................dr 900000   

to equity share capital a/c 900000

oct 1 bank a/c.........................dr 900000

to equity share allotment a/c 900000

feb 1v2018 equity share first and final call a/c.............dr 1800000

to equity share capital a/c 1800000

mar 1 bank a/c....................dr 1800000

to equity share first and final call a/c 1800000

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