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January 8 A prospectus was issued, inviting applications for 200,000 B ordinary shares at an issue price of $2, payable full on application. The purpose
January 8 A prospectus was issued, inviting applications for 200,000 "B ordinary shares at an issue price of $2, payable full on application. The purpose of the issue was to fund the redemption of the preference shares. 200,000 "A" ordinary shares, issued at $1, fully paid 100,000 redeemable preference shares, issued at S 4, fully paid 50,000 $2 Options Asset revaluation reserve Retained earnings $ 200,000 $ 400,000 $ 100,000 100,000 $ 770,000 February 8 The issue closed fully subscribed, with all money due having been received. The 200,000 "B" ordinary shares were allotted on the same day. As previously indicated, the directors resolved to redeem the preference shares (equity) out of the proceeds of the "B" ordinary shares. Cheques were issued to the preference shareholders. February 1 The company offered ordinary shareholders 2 options (at a price of $0.80 per option) for every ten ordinary shares held. Each option entitled the holder to buy two ordinary shares at a price of $3 per share, exercisable on 1 April 200,000 "A" ordinary shares, issued at $1, fully paid 120,000 "B" ordinary shares, issued at $1.50, called to $1 General reserve Retained earnings $ 200,000 120,000 $ 100,000 $ 500,000 March 1 75% of the available options were taken up by shareholders, for which all money due was received April 1 As a result of options having been exercised, 80,640 shares were issued and for which money had been received. The unexercised options lapsed. Required: the general journal entries to record the above Narrations to general journal entries must be provided. (Note that narrations are not required in the examination)
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