A company with 50,000 £1 shares in issue wishes to make a rights issue to its existing shareholders.

The rights issue is a 2 for 5 rights issue at a price of £1.20 per share. The par value of each share is £1 and the shares trade in the market at a price of £2.50 each. Calculate the number of shares issued in the rights issue and show the double entry that the company would record.