On 1 August 1990 Smile Ltd issues 50,000 shares at $1.00. The terms of the issue requiring the shareholders to pay $0.60 immediately with the balance due in one years time. In one years time, the company makes a call on the shareholders for the remaining $0.40 per share, with payments to be made by 31 August 1991. Holders of 49,000 shares pay the required call by 31 August 1991. On 5 September, the company forfeits the shares on which the call was not paid.

Required

Prepare the journal entries required to record the above transactions.

The forfeited shares were reissued on 5 November 1991 as fully paid to $1.00 on payment of $0.80 per share, with the forfeited shares account being used to fund the difference as well as any costs of reissue. Assuming all the shares were reissued, incurring costs of $150, and any balance of the forfeited shares account being returned to the former shareholders,