Rights issue  LO6 Sunny Day Ltd needs to raise funds for mining projects in Western Australia. It currently has share capital of $2 million dollars and has issued 1 million shares. The directors have decided to make a non‐renounceable rights issue to existing shareholders of 200 000 new shares at an issue price of $10 per share. Rainy Day Ltd, a firm of finance brokers has agreed to fully underwrite the rights issue. Sunny Day Ltd issued a prospectus on 1 April 2019 and applications closed on 3 May 2019. Costs associated with the rights issue and the eventual issue of the shares were $20 000. Required 1. Prepare the journal entries for the rights issue and the subsequent share issue made by Sunny Day Ltd, assuming that 80% of the rights were exercised by the due date. 2. Prepare the journal entries assuming that the rights issue was not underwritten and that any unexercised rights lapsed.