Prepare general journal entries to record the transactions

Assignment Help Financial Accounting

Reference no: EM134046

Question :

Cajun Ltd's equity at 30 June 2011 was as given:

400 000 ordinary shares, issued at $1.60, fully paid $640 000

500 000 ordinary shares, issued at $2, called to $1.20 600 000

180 000 redeemable preference shares, issued at $1, fully paid 180 000

Calls in advance (10 000 ordinary shares) 8 000

Share issue costs (7 000)

General reserve 60 000

Retained earnings 310 000

The subsequent events occurred during the year ended 30 June 2012:

2011

July 15 The final call, due 31 August, was made on the partly paid shares.

Aug 31 All call money was received, except for that due on 24,000 shares.

Sept 10 In accordance with the constitution, the shares on which the call was unpaid were forfeited. The company is entitled to keep any balance from forfeiture of shares.

Oct 1 The Company provided ordinary shareholders 1 option (at a price of 80 cents per option) for each 5 shares held. Each option entitled the holder to purchase 1 ordinary share at a price of $1.50 per share, exercisable on or before 15 April 2012.

Oct 31 70 000 options were taken by shareholders, for which all money due was received.

2012

Jan. 3 A prospectus was issued, inviting applications for 10 000 ordinary shares at an issue of $2, payable in full on application. The reason of the issue was to fund the redemption of the preference shares. The issue was underwritten at a commission of $6 700.

Jan 31 The issue closed fully subscribed, with all money due having been received.

Feb. 5 The 100 000 shares were allotted, and the underwriting commission was paid.

Feb 18 The directors resolved to redeem the preference shares out of the proceeds of the January share issue for $1.06 per share.

Feb 26 Cheques were issued to the preference shareholders.

April 15 52 000 shares were issued as a result of 52 000 options having been exercised, for which money had been received. The unexercised options lapsed.

Required

Prepare general journal entries to record the above transactions.

Reference no: EM134046

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