Prepare general journal entries to record the transactions

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Question - On 1 July 2020 Jenny Ltd issued a prospectus to the public offering 15 million shares at $2.00 each. The prospectus specified that $1.00 per share is to payable on application and a further $0.50 will be payable on allotment. The closing date for applications was 31 August 2020.

By the closing date, applications have been received for 20 million shares. To deal with the oversubscription, the directors of Jenny Ltd decided to issue shares to all subscribers on a pro rata basis. Excess money received on application will be credited against the amounts due on allotment.

All amounts due on allotment are paid by the due date of 15 September 2020.

On 30 November 2020, Jenny Ltd made the call for the outstanding balance of $0.50 per share with the amounts being payable by 31 December 2020. Holders of 5 million shares fail to pay the amount due of the call by the due date, and on 15 January 2021 the directors forfeited the shares. The forfeited shares were cancelled and reissued on 15 February 2021 as fully paid to $2.00 on payment of $1.50 per share. The reissue of the forfeited shares cost $6 000. The balance in the forfeited shares account were refunded to the forfeited shareholders by 28 February 2021.

REQUIRED - Prepare general journal entries to record the above transactions. Show all workings.

Reference no: EM132602181

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