Question
In: Accounting
In July 2020, Worley Ltd calls for public subscriptions for 20 million shares. The issue price...
In July 2020, Worley Ltd calls for public subscriptions for 20 million shares. The issue price per share is $1.20, to be paid in three parts, these being $0.50 on application, $0.40 within one month of the shares being allotted and $0.30 within two months of the first and final call, with the call for final payment being payable on 1 September 2020. By the end of July, when applications close, applications have been received for 24 million shares; that is, 4 million in excess of the amount to be allotted. The shares are allotted on 1 August 2020. Regarding final call for $0.30 per share, it becomes apparent that the holder(s) of 200 000 shares have failed to pay the amount due. As a result, the directors of the company elect to forfeit the shares.
Worley Ltd reissues the shares on 1 October 2020 as fully paid for an amount of $1.00; that is, $0.20 below the original issue price. The costs involved in generating the sale of the shares amount to $5,000.
Required:
Provide the accounting entries to record the issue of Worley Ltd’s shares.
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Solutions
ekkarill92 answered 1 year agoRelated Solutions
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