Question:

In July 2018, NBS Ltd calls for public subscriptions for 72,000 shares. The issue price per share is $1.10, to be paid in three instalments being $0.60 on application, $0.20 within one month of the shares been allotted and $0.30 within two months of the first and final call.

By the end of August, when applications close, applications have been received for 90,000 shares with all shareholders only paying the required application fee. The constitution of the company states that excess monies on application can be applied to future allotments and calls.

The company directors decided to allot shares on a pro rata basis being 8 shares for every 10 applied for. Allotment of the shares happened on 1 September. All outstanding allotment monies were received by the end of September.

Legal costs of forming the company were $1,300 and were paid on 11 October. Share issue costs of $10,000 were also paid on the same date.

The business called for final payment on 1 November and the holders of 57,000 shares made the payment that due on 30 December. The directors decided to forfeit the remaining 15,000.

On 31 December, the directors decided to reissue the 15,000 shares as fully paid for a consideration of 70c per share. The cost of reissuing is $600. By 15 January 2019, all monies were received. Surplus funds were returned to the original shareholders by 30 January 2019.

On 1 March 2019, a 1-for-10 rights issue was made to all existing ordinary shareholders at an issue price of $10 per share. All rights were exercised by the expiry date 31 March.

On 1 April 2019, an offer was made to all existing ordinary shareholders to apply for one $100 7% debenture for every 100 shares held. Applications and money were received from holders of 100 000 share by 20 April.

Required:

Prepare general journal entries to record the above transactions of NBS Ltd. Narrations are required. (10 marks)