Question
Central Land Ltd. issues prospectus inviting the public to subscribe for 1 million ordinary shares of $1.80 each. The terms of the issue are
Central Land Ltd. issues prospectus inviting the public to subscribe for 1 million ordinary shares of $1.80 each. The terms of the issue are that $1.00 is to be paid on application and the remaining $0.80 within one month of allotment. Applications are received for 1.2 million shares during July 2021. The directors allot 1 million shares on 5 August 2021. All applicants receive shares on a pro rata basis. The amounts payable on allotment are due by 5 September 2021. By 5 September 2021 the holders of the 100 000 shares failed to pay the amount due on allotment. The directors forfeit the shares on 10 September 2021. Required: Prepare the journal entries which are necessary to account for the above transactions and events. (Ignore narrations).
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