Question 1 0n 1 March 2020, MBS Ltd issued a prospectus inviting applications for 1,200,000 ordinary shares at an issue price of $4. The shares were payable $1 on application, $2 on allotment (due 30 April], and $1 on a nal call [expected to be made after 2 years]. The issue was underwritten at a commission of $10,000. By 31 March 2020, applications had been received for 1,000,000 ordinary shares. 0n 1 April 2020, the directors allotted 1,200,000 ordinary shares. The underwriter paid application [$1] amounts due less commission on 4 April 2020. All outstanding allotment money was received by the due date. On 10 May 2020, MBS Ltd issued 100,000 ordinary shares privately to XYZ insurance company at a price of $4. On 30 ]une 2020, a 10 cent (per share) final dividend was declared and approved for all ordinary shares issued. The payment ofthe dividend was subsequently made on 1 August 2020. Required (a) Prepare the journal entries to record the transactions of M35 Ltd for the events outlined above. Narrations are not required. [b] Public companies can raise share capital by providing prospectus and encouraging public subscription of shares [i.e., public share oat] or by issuing shares privately to institutional investors [i.e., private placement]. Discuss M reasons why some companies may prefer private placement over public share oat. (Total = 10 + 4- = 14- marks]