Prepare general journal entries to record the transactions

Assignment Help Financial Accounting

Reference no: EM131193759

An extract of Statement of Financial Position of Acme Ltd at June 30, 2014 showed the following information:

Liabilities:

20,000 8% debentures $2,000,000
Equity:
2,000,000 Ordinary $5 shares $10,000,000

Acme Ltd wished to pay off the debentures early and proposed a new share issue to raise the necessary funds. A prospectus was issued, offering to the public 400,000 $5 Shares, payable: $3 on application and a further $2 instalment to be paid on allotment. The closing date for the application was 5th Jan 2015, when it was found that the applications had been submitted for 450,000 shares.

Shares were allotted on 15^th Jan 2015 and on that date any excess application money was refunded. The instalment money was received in full on 31st Jan 2015.

On February 1st 2015 Acme Ltd purchased 15,000 of the outstanding debentures on the P stock market for a unit price of $103

Acme Ltd redeemed the remaining 5,000 debentures at their maturity on 01/05/2015.

Required:

1. Prepare general journal entries (including cash entries) to record the transactions.

Reference no: EM131193759

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