On 1 December 20x1, Eastern Corporation engaged the services of an investment bank to provide consultancy services on its initial public offering (IPO) in May 20x2. The agreed fee for the consultancy services was $500,000, which was to be settled by Eastern Corporation issuing 2,500,000 ordinary shares to the investment bank. The fee was not conditional on the success of the initial public offering. Assume that the service was performed continuously over the period to May 20x2.

The initial public offering was successfully launched on 31 May 20x2. Eastern Corporation’s financial year-end is 31 December.

Required

Prepare journal entries to record the share-based transaction on 31 December 20x1 and 31 May 20x2.