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Point 1: On 1st of June 2020, Pretty Ltd issued a prospectus inviting applications for 500,000 ordinary shares at an issue price of $5. These shares were payable $1 on application, $2 on allotment (due 31st of July) and $1 on final call.
Point 2: By the 31st of June, applications had been received for 900,000 ordinary shares. On 1st July, 500,000 ordinary shares were issued. The constitution allows the directors to apply excess application money to the allotment account. All outstanding allotment money was received by the due date, and share issue costs of $20,000 were paid.
Question 1: How would use the information to attempt the journal entries?
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