QUESTION 2

Carnation Bhd incorporated on 1.1.x9 and has in issue 60,000,000 ordinary shares of RM

1 each fully paid. Carnation Bhd decided to make a public issue of 15,000,000 new ordinary

shares at an issue price of RM 1.60 per share to the public. Applications for 25,000,000

new shares are received. The board of directors decided to refund applications for

5,000,000 shares and to pro-rate the balance of the applications on the basis of 3 shares for

every 4 applied. All applications money were received when due and excess money

returned.

Required:

Prepare:

a- journal entries to record the above transaction, and

b- an extract of statement of financial position.