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Example 2. Oversubscription of Ordinary Share Issue ABC issued a prospectus for 100,000 $5 shares on 1 January 2021. The prospectus required payment of $3 on application and $2 when they receive the allotment letter. The company received applications for a total of 125,000 shares - these applications were received throughout the month of January. On 31 January 2021 ABC finished the allotment and issued 100,000 shares. Required: Prepare the journal entries to account for the issue of shares assuming the excess money was applied to allotment.

Example 2. Oversubscription of Ordinary Share Issue ABC issued a prospectus for 100,000 $5 shares on 1 January 2021. The prospectus required payment of $3 on application and $2 when they receive the allotment letter. The company received applications for a total of 125,000 shares - these applications were received throughout the month of January. On 31 January 2021 ABC finished the allotment and issued 100,000 shares. Required: Prepare the journal entries to account for the issue of shares assuming the excess money was applied to allotment.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Example 2. Oversubscription of Ordinary Share Issue ABC issued a prospectus for 100,000 $5 shares on 1 January 2021. The prospectus required payment of $3 on application and $2 when they receive the allotment letter. The company received applications for a total of 125,000 shares - these applications were received throughout the month of January. On 31 January 2021 ABC finished the allotment and issued 100,000 shares. Required: Prepare the journal entries to account for the issue of shares assuming the excess money was applied to allotment.
Transcribed Image Text:Example 2. Oversubscription of Ordinary Share Issue ABC issued a prospectus for 100,000 $5 shares on 1 January 2021. The prospectus required payment of $3 on application and $2 when they receive the allotment letter. The company received applications for a total of 125,000 shares - these applications were received throughout the month of January. On 31 January 2021 ABC finished the allotment and issued 100,000 shares. Required: Prepare the journal entries to account for the issue of shares assuming the excess money was applied to allotment.
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