Rights issues and private placements

The equity of Ash Ltd on 30 June 2020 was:

Share capital (issued at $4, fully paid) Asset revaluation surplus Retained earnings

$

1 200 000 700 000 400 000

The following transactions occurred during the year ended 30 June 2021.

1. On 1 August 2020, a 1-for-4 rights offer was made to existing shareholders. The issue price was $4 per share payable in full on allotment, and rights were transferable. Shares issued under the offer were to rank equally with existing shares as from 1 August 2020. The issue was underwritten for a commission of $8000. The issue closed fully subscribed on 31 August, the holders of 50 000 shares having transferred their rights. Directors proceeded to allotment. The underwriting commission was paid on 7 September.

2. On 1 March 2021, 220 000 shares were privately placed with Blossom Investments Ltd at $4 per share.

Required

1. Prepare general journal entries to record the above transactions.
2. Prepare the equity section of the statement of financial position as it would appear at 30 June 2021, assuming a profit for the year of $50 000.