Question 7 Answer saved Marked out of 1.00 P Flag question A company's capital consists of 50,000 ordinary shares issued at $2 and paid to $1 per share. On 1 September, a first call of 50c was made on the ordinary shares. By 30 September, the call money received amounted to $22.500. No further payments were received, and on 31 October, the shares on which calls were outstanding were forfeited.On 15 November, the forfeited shares were reissued as paid to $1.50 for a payment of $1.00 per share. The appropriate cash amount from the reissue was received on 19 November. Costs of reissue amounted to $500. The company's constitution provided for any surplus on resale, after satisfaction of unpaid calls, accrued interest and costs, to be returned to the shareholders whose shares were forfeited.The entry to record the forfeiture of shares is: O a. Share capital Dr 5,000 Forfeited shares liability Cr 5,000 O b. Forfeited shares liability Dr 2,500 Share capital Cr 2.500 Oc. Share capital Dr 7,500 First call - Ordinary shares Cr 5,000 Forfeited shares liability Cr 2.500 O d. Share capital Dr 7.500 First Call - Ordinary shares Cr 2.500 Forfeited shares liability Cr 5,000