Question 6: The following information relates to Green Mountains Ltd for the year ended 30 June 2020:

Green Mountains Ltd

Trial Balance

As at 30 June 2020

	Dr $	Cr $
Ordinary share capital		397 500
Asset revaluation reserve		40 000
Retained earnings (1 July 2019)	1 500
Cash at bank	118 700
Accounts receivable	32 800
Inventory	17 000
Accounts payable		10 500
Debentures (due Nov 2029)		50 000
Profit and loss (before taxation)		131 500
Prepayments	30 000
Term deposit	25 000
Office furniture and equipment	65 000
Accumulated depreciation, office furniture and equipment		18 500
Land	260 000
Buildings	230 000
Accumulated depreciation, buildings		62 000
Accrued expenses		10 000
Interim dividend	20 000
General reserve		80 000
	$800 000	$800 000

Additional Information

• On 1 July 2019, share capital consisted of 1 000 000 fully paid 30 cent ordinary shares.
• During the year, an offer of 200 000 ordinary shares at 50 cents each was made to existing shareholders, on the basis of one to five shares held. Applications closed fully subscribed on 1 March 2020 and the shares were allotted on 1 June. An invoice was received from Premium Underwriters for share issue costs amounting to $2 500 on 25 June 2020.
• A taxation liability on the years profit is estimated at $42 000.
• The term deposit has a 70 day maturity.
• A final dividend of 10% on share capital held at 30 June 2020 is to be recommended.
• $25 000 is to be transferred to a general reserve.

Prepare all necessary General journal entries to account for the share issue and subsequent share issue costs made during the year including any closing entries.