Question: Share issue

Zorba Ltd was incorporated on 1 July 2019 and issued a prospectus inviting applications for 500,000 ordinary shares at an issue price of $10.

The shares are payable as follows:

$5 payable on application

$2 payable on allotment

$3 payable on call to be made 30th September 2019

Share issue costs were $1,500 and legal costs were $500

The transactions for the period were as follows:

31 August 2019: Applications were received for 560,000 shares.

3 September 2019: Applications for 60,000 were rejected by the directors and the application money was refunded to the shareholders concerned.

4 September 2019: The Company allotted 500,000 shares to the remaining applicants.

25 September 2019: All the allotment money was received. Share issue and legal costs were paid in cash.

30 September 2019: The call was made on the shares, payable by 31 October 2019.

31 October 2019: Call money was received from the shareholders of only 480,000 shares.

31 December 2019: The remaining 20,000 shares were forfeited. The forfeited shares were offered to an investment company at a price of $8 per share paid to $10 and the transfer was completed on 31 March 2020. The costs of reissue amounted to $1,500.

The companys constitution states that any forfeited shares must be refunded to the shareholders.

30 April 2020: These shareholders received a refund for the amount owed to them.

Required: Prepare the general journal entries (as per template below) in the books of Zorba Ltd to record the above transactions. Provide narrations for all your entries.