Reference no: EM132752364
Question: On 16 March 2019, Delilah Ltd was incorporated and a prospectus was issued inviting applications for 150,000 shares at an issue price of $7, payable as follows:
$4 on application
$1 on allotment
$2 on final call
By 16 May 2019, applications had been received for 200,000 ordinary shares of which applicants for 60,000 shares forwarded the full $7 per share, the remainder 140,000 shares paying only the application money.
On 1 June 2019, the directors decided allot shares in full to applicants who had paid the full amount, refund the money to applicants for 40,000 shares and then issue the remaining shares proportionately to the other applicants. In accordance with the prospectus, all surplus money on application can be transferred to the Allotment and Call accounts. The issue was underwritten at a commission of $27,000 which was paid on 1 June 2019. All outstanding allotment money was received by 30 June 2019.
The final call was made on 11 November 2019 with money due by 30 November 2019. All outstanding call monies except a parcel of 20,000 shares were received by 30 November 2019. On 1 December 2019, the directors decided to forfeit the 20,000 shares. On 5 December 2019, the forfeited shares were reissued as fully paid ordinary shares for a consideration of $6 per share. Costs of forfeiture and reissue amounted to $3,500. The company's constitution does not allow for the balance related to forfeited shares to be refunded to the former shareholders.
Required: Prepare journal entries to record all of the above events from the 16 March 2019 to 5 December 2019. Descriptions/Narrations are NOT required.
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