Brighton Ltd issues a prospectus inviting the public to subscribe for 10 million ordinary shares

of $2.00 each. The terms of the issue are that $1.00 is to be paid on application and the

remaining $1.00 within one month of allotment.

Applications are received for 12 million shares during July 2015. The directors allot 10 million

shares on 5 August 2015. All applicants receive shares on a pro rata basis. The amounts

payable on allotment are due by 5 September 2015.

By 5 September 2015 the holders of two million shares have failed to pay the amounts due on

allotment. The directors forfeit the shares on 10 September 2015. The shares are resold on 15

September 2015 as fully paid. An amount of $1.80 per share is received.

Required:

Provide the journal entries necessary to account for the above transactions and events.