Wolfgang issue shares via installment. On 1st June they issue a prospectus to potential investors advertising that they will sell $2,500,000 worth of shares at $1 each. Payable $0.30 on application, $0.30 on allotment, and $0.20 on call. By 15th September, the applications are all received, and 2,900,000 share applications were received. On 30th September, Wolfgang decide to refund excess applications. What journal entry should be entered on 30th September? Dr Cash trust $290 000; Cr Cash $290 000 O Dr Application $750 000; Cr Allotment $750 000 Dr Application $120 000; Cr Cash trust $120 000 O Dr Cash $870 000; Cr Cash trust $870 000

Wolfgang issue shares via installment. On 1st June they issue a prospectus to potential investors advertising that they will sell $2,500,000 worth of shares at $1 each. Payable $0.30 on application, $0.30 on allotment, and $0.20 on call. By 15th September, the applications are all received, and 2,900,000 share applications were received. On 30th September, Wolfgang decide to refund excess applications. What journal entry should be entered on 30th September? Dr Cash trust $290 000; Cr Cash $290 000 O Dr Application $750 000; Cr Allotment $750 000 Dr Application $120 000; Cr Cash trust $120 000 O Dr Cash $870 000; Cr Cash trust $870 000

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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Please explain .
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Aqua Ltd issues a prospectus inviting the public to subscribe for 30 million ordinary shares of $2.00 each. Theterms of the issue are that $1.00 is to be paid on application and the remaining $1.00 within one month ofallotment.Applications are received for 36 million shares during July 2019. The directors allot 30 million shares on 15August 2019. The shares were allotted on a first-come, first-serve basis. The directors refunded the applicationmoney for 6 million shares on 15 August 2019. The amounts payable on the allotment are due by 20 September2019.By 20 September 2019, the holders of 5 million shares have failed to pay the amounts due on allotment. Thedirectors forfeit the shares on 30 September 2019. The shares are resold on 15 October 2019 as fully paid. Anamount of $1.90 per share is received. The remaining balance of forfeited shares were refunded on 20 October2019.Provide the journal entries necessary to account for the above transactions and events.