Question
repare journal entries to record the following transactions for Michael Ltd 2020 July 1 A prospectus was issued inviting applications for 200 000 ordinary shares
repare journal entries to record the following transactions for Michael Ltd
2020 |
|
July 1 | A prospectus was issued inviting applications for 200 000 ordinary shares at an issue price of $4, with $3 payable on application and the balance payable in a call on 15 August 2021. The issue was underwritten at a commission of $4000. The company also offered those shareholders who purchased more than 1000 shares the right to acquire options for 70c each. The options allowed investors to acquire shares in Michael for $3 each (paid to $4) before 30 November 2020. |
21 | Applications closed with the ordinary share issue oversubscribed by 20 000. Applications were received for 20,000 options. |
31 | All shares and options were allotted, and application money refunded to unsuccessful applicants for ordinary shares. |
Aug. 14 | The underwriter was paid their commission. |
Nov 30 | By Nov 30 the price of Michael Ltd.s shares was $3.20. The holders of 18,000 options exercised the options and the remainder lapsed. |
2021 |
|
Aug. 1 | The first and final call was made on the ordinary shares for $1 per share |
15 | The balance payable on the call on the ordinary shares was received from holders of 199 000 ordinary shares. |
22 | The shares on which call money was not received were forfeited. |
25 | The forfeited shares were placed with an institutional investor, paid to $4 on payment of $3.80. The cash was received from the financial institution, and any balance in the forfeited shares account returned to the former shareholders. Reissue costs amounted to $500. |
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