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The telecommunications industry in a particular country has been a part of the public sector. As a part of its privatisation agenda, the government decided to establish a limited liability company called Telecom Plus, with the issue of 10 million $3 shares. These shares were to be offered to the citizens of the country. The terms of issue were such that investors had to pay $2 on application and the other $1 per share would be called at a later time.
Question a) Discuss the nature of the limited liability company and in particular the financial obligations of acquirers of shares in the company.
Question b) Prepare the journal entries that would be required if applications were received for 10 million shares.
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