Share issue, options   LO6, 7 On 30 June 2018, the equity accounts of Moray Ltd consisted of: 175 000 ‘A’ ordinary shares, issued at $2.50 each, fully paid $437 500 50 000 6% cumulative preference shares, issued at $3 and paid to $2 100 000 Options (20 000 at 56c each) 11 200 Accumulated losses (6 250) As the company had incurred a loss for the year ended 30 June 2018, no dividends were declared for that year. The options were exercisable between 1 March 2019 and 30 April 2019. Each option allowed the holder to buy one ‘A’ ordinary share for $4.50. The following transactions and events occurred during the year ended 30 June 2019. 2018 July 25 The directors made the final call of $1 on the preference shares. Aug. 31 All call monies were received except those owing on 7500 preference shares. Sept. 7 The directors resolved to forfeit 7500 preference shares for non‐payment of the call. The constitution of the company directs that forfeited amounts are not to be refunded to shareholders. The shares will not be reissued. Nov. 1 The company issued a prospectus offering 30 000 ‘B’ ordinary shares payable in two instalments: $3 on application and $2 on 30 November 2016. The offer closed on 30 November. 30 Applications for 40 000 ‘B’ ordinary shares were received. Dec. 1 The directors resolved to allot the ‘B’ ordinary shares pro rata with all applicants receiving 75% of the shares applied for. Excess application monies were allowed to be held. The shares were duly allotted. 5 Share issue costs of $5200 were paid. 2019 April 30 The holders of 15 000 options applied to purchase shares. All monies were sent with the applications. All remaining options lapsed. The shares were duly issued. Required 1. Prepare general journal entries to record the above transactions. 2. If Moray Ltd buys back 25 000 preference shares for $3.50 per share, what factors would its accountant have to consider in determining how best to record the transaction in the accounts?