On 1 April 2020, Boneyard Ltd issued a prospectus, inviting the public to apply for shares...
On 1 April 2020, Boneyard Ltd issued a prospectus, inviting the public to apply for shares in their IPO. 500,000 shares were being offered at a price of $2.50 each, payable in full on application. Junktown Ltd agreed to fully underwrite the issue in exchange for a fee of $25,000. Applications closed on 26 April 2020, with applications (and money) for 400,000 shares received. Shares were issued on 8 May 2020, with transactions involving the underwriter settled on 11 May. Which of the following is NOT a journal entry that would be used to record the above transactions?
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Dr Cash $1 000 000 Cr Cash trust $1 000 000 |
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Dr Application $1 000 000 Cr Share capital $1 000 000 |
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Dr Cash $225 000 Cr Receivable from underwriter $225 000 |
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Dr Share Capital $225 000 |
Homework Answers
The answer which is not the journal entry to record the transaction is :
The last option was incomplete transaction which consist of only debit which is not the journal entry to record the transaction
I.e Dr Share Capital $225 000 there is only debit bt no credit entry is given
Hence which is not a journal entry to record the transactions given in question
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