Share capital of OZ Ltd at 31 March 2019 was as follows: 300 000 ordinary shares at an issue price of $4 each paid to $2.50, and 100 000 preference shares at an issue price of $4 each paid to $2.

At that date, a further call of $1.50 on ordinary shares and $2 on preference shares was made.

During the 3 months to 30 June 2019, all calls were duly received except those on 5000 preference shares which were forfeited as at 30 June 2019.

To bring capital back to the original amount of issued capital, the forfeited shares were offered to an investment company at a price of $3.50 per share paid to $4 and the transfer was completed on 30 September 2019.

According to the companys constitution, shareholders equity in forfeited shares must be refunded to them. On 31 October, the previous owner of forfeited shares received a refund cheque for the amount due, less selling costs of $720.

Required:

Show journal entries with proper narrations to implement the above transactions.