Find which alternatives represents the correct journal entry

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World Cup Ltd was registered on 1 March 2020 with an authorised share capital of 500 000 ordinary shares with no par value. During March 2020, 100 000 ordinary shares were offered to the founders of the company at R10 each. These shares were taken up and paid for by the founders. On 1 May 2020 the company offered 60% of the authorised ordinary shares at R15 each for subscription to the public. Applications for 350 000 shares were received by 15 June 2020, the closing date for applications. On 30 June 2020 the shares were allotted and the money repaid to the unsuccessful applicants.

Question 1: Which one of the following alternatives represents the correct journal entry for the allotment of shares to successful applicants on 30 June 2020 by World Cup Ltd?

1. Debit R Application and allotment: Ordinary shares 4 500 000 Ordinary share capital 4 500 000 Credit R

2. Debit R 5 250 000 Credit R Application and allotment: Ordinary shares Ordinary share capital 5 250 000

3. Debit R 4 500 000 Credit R Ordinary share capital Application and allotment: Ordinary shares 4 500 000 Debit R 5 250 000

Credit R Ordinary share capital Application and allotment: Ordinary shares 5 250 000

Reference no: EM132645959

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