Question

In: Accounting

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

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

Solutions

Expert Solution

Answer
Journal Entry
Date Account titles and explanation Debit (million) Credit (million)
July,2019 Bank A/c $       36
Share Application A/c $       36
(To record Application Money Received)
July,2019 Share Application A/c $       30
Share Capital A/c $       30
(To record Application Money Accepted)
15.08.19 Share Application A/c $         6
Bank A/c $         6
(To record Excess Money Refunded)
15.08.19 Share Allotment A/c $       30
Share Capital A/c $       30
(To record Allotment money due)
20.9.19 Bank A/c $       25
Share Allotment A/c $       25
(To record Allotment Money Received)
30.9.19 Share Capital A/c $       10
Forfeited Shares A/c $         5
Share Unpaid A/c $         5
(To record forfeiture of 5 million shares for non-payment of call of $1 per share
15.10.19 Bank A/c $       10
Share Forfeiture A/c $         1
Share Capital A/c $       10
( To record shares reissued as fully paid)
Service revenue

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Aqua Ltd issues a prospectus inviting the public to subscribe for 30 million ordinary shares of...
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...
RCK Ltd issues a prospectus inviting the public to subscribe for 90 million ordinary shares of...
RCK Ltd issues a prospectus inviting the public to subscribe for 90 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 108 million shares during July 2018. The directors allot 90 million shares on 15 August 2018. All applicants receive shares on a pro rata basis. The amounts payable on allotment are due by 20 September...
RCK Ltd issues a prospectus inviting the public to subscribe for 90 million ordinary shares of...
RCK Ltd issues a prospectus inviting the public to subscribe for 90 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 108 million shares during July 2018. The directors allot 90 million shares on 15 August 2018. All applicants receive shares on a pro rata basis. The amounts payable on allotment are due by 20 September...
Tom Hanks Ltd issues a prospectus inviting the public to subscribe for 5 million ordinary shares...
Tom Hanks Ltd issues a prospectus inviting the public to subscribe for 5 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 6 million shares during July 2015. The directors allot 5 million shares on 5 July 2015. All applicants receive shares on a pro-rata basis. The amounts payable on allotment are due by 5 August...
Question 3 Week 4 (7 marks) Aqua Ltd issues a prospectus inviting the public to subscribe...
Question 3 Week 4 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...
On 1 November 2019, Pink Ltd issued a prospectus inviting applications for 200 000 ordinary shares...
On 1 November 2019, Pink Ltd issued a prospectus inviting applications for 200 000 ordinary shares to the public at an issue price of $4, payable as follows: $2 on application (due by closing date of 1 February 2020) $1 on allotment (due 31 March 2020) $1 on future call/calls to be determined by the directors By 1 February 2020, applications had been received for 250 000 ordinary shares of which applicants for 100 000 shares forwarded the full $4...
January 8 A prospectus was issued, inviting applications for 200,000 “B” ordinary shares at an issue...
January 8 A prospectus was issued, inviting applications for 200,000 “B” ordinary shares at an issue price of $2, payable full on application. The purpose of the issue was to fund the redemption of the preference shares. 200,000 “A” ordinary shares, issued at $1, fully paid $ 200,000 100,000 redeemable preference shares, issued at $ 4, fully paid $ 400,000 50,000 $2 Options $ 100,000 Asset revaluation reserve $ 100,000 Retained earnings $ 770,000 February 8     The issue closed fully...
ASX Ltd makes an offer of shares to the public. In its prospectus it notes that...
ASX Ltd makes an offer of shares to the public. In its prospectus it notes that the shares are to be issued at $1.00 per share. The shares are to be paid in three instalments. The first payment, to be made on application is $0.40. A second amount of $0.40 will be due within one month of allotment and the third amount of $0.20 will be due within one month of the first and final call. ASX Ltd will seek...
2. Arcarde Ltd issues both ordinary shares and preference shares to raise capital, in which 500,000...
2. Arcarde Ltd issues both ordinary shares and preference shares to raise capital, in which 500,000 ordinary shares have been issued at the price of $10 and 100,000 preference shares with a par value of $100. a. Company promises to pay an annual dividend rate of 6.5% per share for its preference shares. If similar investment has a rate of return of 10% p.a, what is the fair price of Arcarde’s preference share? b. Company also plans to pay dividend...
On 1 July 2019, Vajra Ltd was incorporated and offered 2,500,000 ordinary shares to the public...
On 1 July 2019, Vajra Ltd was incorporated and offered 2,500,000 ordinary shares to the public at an issue price of $4.00 per share, with $1.50 payable on application, and $1.50 upon allotment (due within one month of allotment) and $1.00 payable on another call to be made at a later date. The issue is underwritten at a commission of $42,000. By 31 July 2019, applications had been received for 2,450,000 shares. On 12 August 2019, shares were allotted, and...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT