Aqua Ltd issues a prospectus inviting the public to subscribe for 30 million ordinary shares of $2.00 each. The terms of the issue are that $1.00 is to be paid on application and the remaining $1.00 within one month of allotment. Applications are received for 36 million shares during July 2019. The directors allot 30 million shares on 15 August 2019. The shares were allotted on a first-come, first-serve basis. The directors refunded the application money for 6 million shares on 15 August 2019. The amounts payable on the allotment are due by 20 September 2019. By 20 September 2019, the holders of 5 million shares have failed to pay the amounts due on allotment. The directors forfeit the shares on 30 September 2019. The shares are resold on 15 October 2019 as fully paid. An amount of $1.90 per share is received. The remaining balance of forfeited shares were refunded on 20 October 2019. Required Provide the journal entries necessary to account for the above transactions and events.

Aqua Ltd issues a prospectus inviting the public to subscribe for 30 million ordinary shares of $2.00 each. The terms of the issue are that $1.00 is to be paid on application and the remaining $1.00 within one month of allotment. Applications are received for 36 million shares during July 2019. The directors allot 30 million shares on 15 August 2019. The shares were allotted on a first-come, first-serve basis. The directors refunded the application money for 6 million shares on 15 August 2019. The amounts payable on the allotment are due by 20 September 2019. By 20 September 2019, the holders of 5 million shares have failed to pay the amounts due on allotment. The directors forfeit the shares on 30 September 2019. The shares are resold on 15 October 2019 as fully paid. An amount of $1.90 per share is received. The remaining balance of forfeited shares were refunded on 20 October 2019. Required Provide the journal entries necessary to account for the above transactions and events.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Provide the journal entries necessary to account for the above transactions and events.

A: Journal entries All the transactions that takes place in an organization are recorded originally in…

Q: RCK ltd issues a prospectus inviting the public to subscribe for 90 million ordinary shares of $2…

A: Calculate the ratio for pro-rata allotment as follows: Pro-rata ratio of 5 by 6 means that 5 shares…

Q: Xero Ltd (Xero) grants 750 share options to each of its six directors on 1 May 2020 and the share…

A: Company means a form of business where the share holder invest money in business in form of shares…

Q: Aqua Ltd issues a prospectus inviting the public to subscribe for 30 million ordinary shares of…

A: Shares are forfeited when a part of the capital which is called by the company is not paid by the…

Q: On 1 April 2019, Magnolia Ltd was incorporated and a prospectus was issued inviting applications for…

A: The journal entries to record the issuance and receipt of money are prepared as follows:

Q: On 1 October 2018, Acacia Ltd issued a prospectus for applications for 200 000 ordinary shares to…

A: Definition: Journal entry: Journal entry is a set of economic events which can be measured in…

Q: MacroApps Corporation's disclosure notes for the year ending June 30, 2020, included the following…

A: An Employee Stock Purchase Plan (ESPP) is a company-sponsored initiative that enables qualified…

Q: Sedunia Berhad was incorporated on 1 July 2020. On 1 August, it decided to issue 300,000 ordinary…

A: Equity Share Capital is a term which refers to the process wherein company in order to raise funds…

Q: Aqua Ltd issues a prospectus inviting the public to subscribe for 30 million ordinary shares of…

A: Note: Forfeiture of shares arises when any shareholder makes default in payment of his dues against…

Q: Applications are received for 1.2 million shares during July 2021. The directors allot 1 million…

A: Shares refer to the unit of ownership which reflects the proportionate number of capital owned by an…

Q: H2O Ltd issues a prospectus inviting the public to subscribe for 30 million ordinary shares of $2.00…

A: Note: When any shareholder makes default in payment of his dues against his shares and company…

Q: Provide all the journal entries necessary to account for the above transactions and events as per…

A: Meaning of Oversubscription of shares Receiving more application for shares than the issued shares…

Q: Provide the journal entries necessary to account for the above transactions and events

A: Journal entries Date Particulars Debit Credit Workings 19-Jul Bank A/c $36,000,000…

Q: Pheonix Limited made an offer to the public via a prospectus of 1,000,000 shares with an issue price…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: Applications were invited by the directors of Grow-big Ltd for 150,000 of its £1 ordinary shares at…

A: Category Applied share Alloted share Amount received on application Excess money Refund money Adjust…

Q: On January 1, 2021, Matsumura Fishworks Corporation is authorized to issue 2,000 shares of common…

A: Treasury shares are those shares which are being repurchased or reacquired by the company from its…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Will Bhd closes its accounts on 31 December annually. On 2 January 2020, the company offered 5,000,000 ordinary shares at RM1 per share to the public and 3,000,000 preference shares at RM2 per share to selected investors. Full payment of both shares must be made upon application. On 31 January 2020 (closing date of application), the company received RM6,000,000 for ordinary shares application and RM6,000,000 for preference shares application. On 28 February 2020, the surplus application money was fully refunded.
On 1 April 2019, Magnolia Ltd was incorporated and a prospectus was issued inviting applications for 100000 shares, at an issue price of $10, payable $5 on application, $2.50 on allotment and $1.25 on calls to be made after the date of allotment. By 30 April, applications were received for 120 000 shares. On 3 May, the directors allotted 100 000 ordinary shares to the applicants in proportion to the number of shares for which applications had been made. The surplus application money was offset against the amount payable on allotment. The balance of the allotment money was received by 10 May. Share issue costs of $800 were also paid on the same date. The calls were made on the dates stated in the prospectus, but the holders of 15 000 shares did not pay call. On 10 March 2017, as provided by the company’s constitution, the directors forfeited the 15 000 shares on which calls were unpaid. The constitution does not provide for refund of any balance in the forfeited shares account after…
Sedunia Berhad was incorporated on 1 July 2020. On 1 August, it decided to issue300,000 ordinary shares on the following terms:Application RM1 per share Allotment RM2 per shareCall as required RM1 per shareTo the end of August, applications for 350,000 shares had been received together withthe application money due on each share. One applicant for 5,000 shares had forwardedRM20,000 in full payment of the shares. On 15 September, the directors proceeded to allot 300,000 ordinary shares on thefollowing basis. Applicants for 30,000 shares were refunded their application money infull, 5,000 shares were allotted to the applicant who paid for the shares in full, and theother successful applicants were allotted the remaining shares, excess application moneybeing transferred to allotment. On 7 October, all allotment money had been received.A first and final call was made on 1 November, and all call money was received by 30November with the exception of the amount due on 6,000 shares.…
During 2012 the following selected transactions affecting shareholders' equity occurred for Italy Company Ltd: Invited applications for 25 000 company shares. The shares were to be issued at $60 per share, payable $20 on application and $30 on allotment and $10 on call By 25 February, applications for 26 000 shares had been received. 1 Feb: Directors resolved to allot the shares, with excess application money to be 5 Mar: applied to allotment. 31 Allotment monies were received in full. Mar: 25 Directors make a call on shareholders for the remaining $10. Apr: 30 Calls are received from all shareholders May: Directors declare a dividend of $1 per share, to shareholders of record on 1 July: 1 August, payable on 1 September. Required: Give the journal entries for each of the transactions.
Gabayan Inc. has been authorized to issue 125,000 shares of P10 par ordinary shares. The following 2019 transactions relate to the initial issuance of Gabayan share : Feb. 1 Gabayan sold subscriptions for 25,000 shares of stock. The shares have a subscription price of P15 per share. One-third of the subscription price was received as down payment 15 Gabayan sold 10,000 shares for P180,000 Mar. 1 An installment amounting to one-third of the subscription price was received . 19 Gabayan exchanged 200 shares of stock for a new two-way radio system having a fair market value of P3,800 Apr. 1 The final one-third of the subscription price was received and the share issued. Required: Prepare a journal entries to record the transactions