Reference no: EM132955421

Jellies is a planetary business that follows IFRS.

The company had begun their calendar fiscal year of 2018 with 560,000 common shares issued and outstanding. Mr. Jell provided you with the following information on the company's transactions for the year.

• The 560,000 outstanding common shares on January 1 had been reported at an amount of $7,959,840.
• The additional 84,000 common shares had been issued on February 1 for cash at $11.50 each.
• 12,000 common shares had been acquired on April 1. "Why did we buy the shares if all we did was to cancel them right after acquiring them on the same day? I had opposed this acquisition till the very last but what could I do against the insistence of the head office. We lost $9,300 on that deal," lamented Mr. Jell.
• On March 25, the company had issued subscriptions for some additional common shares. It received $172,000 upon application at $2.00 per subscription . Thereafter, the subscribers were required to pay $4.00 on April 15 and the balance, being the final instalment, on April 30. The issue was fully subscribed.
• On April 15, subscribers for 8,000 subscribers failed to pay the required instalment. The company received the cash from all of the other subscribers. The defaulting subscribers forfeited the first instalment paid.
• On April 30, the company received $468,000 from the remaining subscribers and on May 1, it issued shares to all subscribers in good standing.

Required:

Problem 1: Prepare journal entries, in proper format, to record all transactions listed below:

i) the issue of shares on February 1.

ii) the acquisition and cancellation of the treasury shares on April 1.

iii) the entries required on March 25.