Question

On 1 July 2020 Jenny Ltd issued a prospectus to the public offering 15 million shares...

On 1 July 2020 Jenny Ltd issued a prospectus to the public offering 15 million shares at $2.00 each. The prospectus specified that $1.00 per share is to payable on application and a further $0.50 will be payable on allotment. The closing date for applications was 31 August 2020.

By the closing date, applications have been received for 20 million shares. To deal with the oversubscription, the directors of Jenny Ltd decided to issue shares to all subscribers on a pro rata basis. Excess money received on application will be credited against the amounts due on allotment.

All amounts due on allotment are paid by the due date of 15 September 2020.

On 30 November 2020, Jenny Ltd made the call for the outstanding balance of $0.50 per share with the amounts being payable by 31 December 2020. Holders of 5 million shares fail to pay the amount due of the call by the due date, and on 15 January 2021 the directors forfeited the shares. The forfeited shares were cancelled and reissued on 15 February 2021 as fully paid to $2.00 on payment of $1.50 per share. The reissue of the forfeited shares cost $6 000. The balance in the forfeited shares account were refunded to the forfeited shareholders by 28 February 2021.

Required

Prepare general journal entries to record the above transactions. Show all workings.

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Answer #1
Application        1.00
Allotment        0.50
First call        0.50
Total        2.00
Jenny Ltd
Journal
Date Particulars LF Debit Credit Calculation
31-08-20 Bank Account Dr         20.00 20 x 1
To Share Application Account         20.00
(Being application money @ $ 1.00 per share
received for 20 million shares)
15-09-20 Share Application Account Dr         20.00 20 x 1
To Share Capital Account         15.00 15 x 1
To Share Application Account           5.00 5 x 1
(Being application money received for 15
million shares transferred to share capital;
excess money adjusted to allotment)
15-09-20 Share Allotment Account Dr           7.50 15 x 0.50
To Share Capital Account           7.50
(Being allotment money @ $ 0.50 per share
made due for 15 million shares alloted)
15-09-20 Bank Account Dr           2.50 (15 x 0.50) - 5
To Share Allotment Account           2.50
(Being allotment money @ $ 0.50 per share
received for 15 million shares after adjustment
from excess application received)
30-11-20 Share First and final call Account           7.50 15 x 0.50
To Share Capital Account           7.50
(Being first and final call money @ $ 0.50 per
share made due for 15 million shares)
31-12-20 Bank Account Dr           5.00 10 x 0.50
Calls in arrears Account Dr           2.50 5 x 0.50
To Share Allotment Account           7.50 15 x 0.50
(Being allotment money @ $ 0.50 per share
received for 10 million shares; holders of 5
million shares defaulted)
15-01-21 Shares Capital account Dr         10.00 5 x 2
To Shares forfeited account           7.50 5 x 1.50
To Calls in arrears account           2.50 5 x 0.50
(Being 5 million shares forfeited on non-payment
of call money; amount received on such shares
transferred to shares forfeited account)
15-02-21 Bank Account Dr           7.50 5 x 1.50
Shares forfeited account Dr           2.50 5 x 0.50
To Share Capital account         10.00 5 x 2
(Being re-issue of 5 million forfeited shares of $ 2
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