Reference no: EM133140821

Question - The discussion now swung towards the issue of the issue of new shares on May 1. Mr. Kount gave you some additional information.

The 540,000 common shares outstanding on January 1 had been capitalized at an amount of $21,600,000

The additional 600,000 had been issued on February 1 at $41.00 each.

The 100,000 treasury shares had been acquired on March 1 at $48.00 each. These had been cancelled the same day.

On March 15, the company issued subscriptions for 60,000 additional common shares at $52.00. Subscribers were required to $12.00 on application; $20.00 on March 31 and the balance on May 1. The issue was fully subscribed.

On March 31, subscribers for 2,000 shares 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 balance was paid by all of the remaining subscribers. On May 1, the company issued shares to all subscribers in good standing.

Required - 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 shares on March 1.

iii] the share subscription on March 15.

iv] the instalment (and default) on March 31.

v] the instalment on April 30.

vi] the issue of the shares on May 1.