Reference no: EM132989736

Rights issues and private placements The equity of Ash Ltd on 30 June 2017 was: Share capital (issued at $4, fully paid) $1,200,000 Asset revaluation surplus $700,000 Retained earnings $400,000 The following transactions occurred during the year ended 30 June 2018. 1. On 1 August 2017, a 1-for-4 rights offer was made to existing shareholders. The issue price was $4 per share payable in full on allotment, and rights were transferable. Shares issued under the offer were to rank equally with existing shares as from 1 August 2017. The issue was underwritten for a commission of $8000. The issue closed fully subscribed on 31 August, the holders of 50 000 shares having transferred their rights. Directors proceeded to allotment. The underwriting commission was paid on 7 September. 2. On 1 March 2018, 220,000 shares were privately placed at $4 per share. Required A. Prepare general journal entries to record the above transactions.