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QUESTION:

Required:

Prepare the journal entries to record these transactions of Princess Ltd. (Show all workings.) Answer the question in the space provided below.

On 1 August 2018, Princess Ltd issued a prospectus inviting applications for 400000 ordinary shares to the public at an issue price of $24, payable as follows:

$8 on application (due by the closing date of 1 November)

$10 on the allotment (due 1 December)

$6 on future calls (date to be determined by the directors)

By 1 November, applications had been received for 430 000 ordinary shares of which applicants for 50000 shares forwarded the full $24 per share, applicants for 150000 shares forwarded $18 per share and the remainder forwarded only the application money.

At a directors' meeting on 7 November, it was decided to allot shares in full to applicants who had paid the either $24 or $18 on application, to reject applications for 10000 shares and to proportionally allocate shares to all remaining applicants. According to the company's constitution, all surplus money from the application can be transferred to the Allotment account.

Share issue costs of $11000 were also paid on 7 November. All outstanding allotment money was received by the due date.

The call was made on 1 February 2019 with money due by 1 March. All money was received by the due date.

On 13 February 2019, the directors issued a prospectus inviting applications for 5 000 5% unsecured debentures of $100 each, payable in full on application. By 22 February, the company received applications for 4 600 of the debentures and they were subsequently allotted.

On 30 June 2019, the company decided to redeem the notes in cash on the open market.

Please, write the answer in the format of the bellow table.

ANSWER: Workings Allocation of money received on application No. of No. of Money Application Allotment Call Shares Shares Received applied for Allotted Journal entries: Date Details Dr $ CRS 3