On 30 April 2020, Sonny Ltd had these balances in their records:

150 000 ordinary shares at no par value	700 000
5% Redeemable cumulative preference shares at N$2,00 each	300 000
Share premium account	45 000
Capital redemption reserve fund	50 000
Retained earnings	258 000
Bank overdraft	105 350
Preliminary expenses	15 000
Dividend Payable	15 000
Underwriters commission (on ordinary shares)	20 000
Inventory	26 350
Property	1 450 000
Equipment	755 600
Accounts receivables	545 650
Accounts Payables	368 000

The authorised share capital of the company is:

250 000 ordinary shares at no par value.

200 000 5% redeemable cumulative preference shares @ N$2,00 each.

150 000 8% redeemable preference shares at N$2,00 each.

The directors have the power to issue un-issued shares and both redeemable preference shares are redeemed at the option of the company.

On 15 May 2020, at a meeting of the directors of Sonny Ltd it was decided that on 01 July 2020, to redeem the 5% redeemable cumulative preference shares at a 10% premium and finance this redemption as follows:

1. A fresh issue of 100 000 8% redeemable preference shares at an issue price at N$2,25/share. This offer was over-subscribed by one and a half times with unsuccessful applicants being refunded.

2. The balance is to be provided for out of retained earnings.

Additional information:

1. Dividend pertaining to preference shareholders has not been paid since 30 April 2019, as the company incurred operating losses up to the commencement of the present financial year.
2. To write off all preliminary expenditure and underwriters commission in the Accounting records immediately after the issue of the 8% redeemable preference shares.
3. Expenses related to the share issue amount to N$7 000 and premium on redemption were to be written off to share premium.
4. Profit for the period is N$ 950 650.
5. Income tax is payable at 30%.

You are required to:

1.1 Prepare the General Journal entries for Sonny Ltd to record the above transactions. (Narrations are not required.) (17 Marks)

1.2 Prepare the statement of changes in equity for the year ended 30 April 2021.

(14 Marks)