Question
On 1 April 2020, Boneyard Ltd issued a prospectus, inviting the public to apply for shares in their IPO. 500,000 shares were being offered at
On 1 April 2020, Boneyard Ltd issued a prospectus, inviting the public to apply for shares in their IPO. 500,000 shares were being offered at a price of $2.50 each, payable in full on application. Junktown Ltd agreed to fully underwrite the issue in exchange for a fee of $25,000. Applications closed on 26 April 2020, with applications (and money) for 400,000 shares received. Shares were issued on 8 May 2020, with transactions involving the underwriter settled on 11 May. Which of the following is NOT a journal entry that would be used to record the above transactions?
| Dr Cash $1 000 000 Cr Cash trust $1 000 000 | ||
| Dr Application $1 000 000 Cr Share capital $1 000 000 | ||
| Dr Cash $225 000 Cr Receivable from underwriter $225 000 | ||
| Dr Share Capital $225 000 |
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