Question

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

Answer 1

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