ABC issued a prospectus for 100,000 $5 shares on 1 January 2016.

The prospectus required payment of $3 on application and $2 in one years time.

The company received applications for a total of 125,000 shares these applications were received throughout the month of January.

On 31 January 2016 ABC issued 100,000 shares.

Required:

Prepare the journal entries to account for the issue of shares assuming the excess money was offset against the call due in one years time.

Please explain the process