Answer this question in an excel/word file and upload the file when completed. Name your file using your last name and student ID eg Smith 12345.

Harrington Ltd is a newly registered company. On 1 January 2023, the company issued a prospectus inviting applications for 2,000,000 ordinary shares at an issue price of $5.00 each, with $3.00 payable on application, $1.50 within one month of allotment, and $0.50 on a call to be made at a later date. The issue is underwritten at a commission of $9,500.

On 31 January 2023, the applications close with the share applications received for 2,100,000 shares. On 15 February 2023, the shares are allotted on a pro-rata basis. The surplus application money is offset against the amount payable on allotment. The underwriter is paid with their commission.

On 15 March 2023, all allotment money is received.

On 1 May 2023, the call is made with money due by the last day of the month. On 31 May 2023, all call money is received except for holders of 30,000 shares who fail to meet the call. On 15 June 2023, the directors forfeit the shares on which call monies are unpaid. The forfeited shares are then reissued on 28 June 2023 as fully paid for consideration of $4.60 per share. Costs of forfeiture and reissue amounted to $3,500 and are paid. The balance in the forfeited shares account is returned to the former shareholders.

Required: Prepare the journal entries necessary to account for the above transactions and events. Show all relevant dates and brief narrations. (13 marks) Explain why the cash trust is raised in the accounting process above. (4 marks)