Issue of option and shares, forfeiture of shares   LO6, 8 Prepare ledger accounts to record the following transactions for Sea Snake Ltd. 2020 July 1 A prospectus was issued inviting applications for 100 000 ordinary shares at an issue price of $3, with $2 payable on application and the balance payable on 10 June 2021. The prospectus also offered 50 000 10% preference shares at $2, fully payable on application. The issue was underwritten at a commission of $6500, allocated equally between the classes of shares. 21 Applications closed with the ordinary share issue oversubscribed by 20 000 and the preference shares undersubscribed by 15 000. 31 All shares were allotted, and application money refunded to unsuccessful applicants for ordinary shares. Aug. 14 The underwriter paid amounts less commission. Dec. 1 The directors resolved to give each ordinary shareholder, free of charge, one option for every two shares held. The options are exercisable prior to 1 June 2021 and allow each holder to acquire one ordinary share at an exercise price of $2.70. Options not exercised prior to that date lapse. 2021 June 1 The holders of 40 000 options elected to exercise those options and 40 000 shares were issued. 10 The balance payable on the ordinary shares was received from holders of 95 000 ordinary shares. 15 The shares on which call money was not received were forfeited. 25 The forfeited shares were placed with a financial institution, paid to $3 on payment of $2.80. The cash was received from the financial institution, and any balance in the forfeited shares account returned to the former shareholders. Reissue costs amounted to $550.