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

The prospectus specified that $2.50 was payable on application, a further $1.25 was payable on allotment and the final $1.25 was payable at call.

On 31 January 2016 ABC issued 100,000 shares.

On 31 May 2016, the company made the call for the outstanding balance of $1.25 per share. The call was payable by 30 June 2016.

At 30 June 2016, the call on 20,000 shares remained unpaid.

On 1 July 2016 the directors of ABC decided to forfeit the 10,000 shares in respect of which the call of $1.25 was not made.

The shares were cancelled and reissued as fully paid to $5 per share on payment of $3.8 per share.

Costs of $500 were incurred to reissue the shares.

Required:

Prepare the journal entries to account for the issue of shares for ABC.