Reference no: EM132918595

On 1 May 2021, the directors of Sheeran Ltd invited applicants for 200,000 ordinary shares for an issue price of $10 per share, payable $6 on application, $2 on allotment and the balance when needed to be called later. By the 30 may 2021 closing date, applications for 250,000 shares were received. On 15 june 2021, the directors decided to issue 200,000 shares on a first-in-first-served basis to the applicants. The directors refunded the money in relation to unsuccessful applications on the same date.

• The allotment money was received by 31 june 2021. Share issue costs of $7,800 were also paid on the same date.
• On 15 October 2021, the directors made a call for the remaining unpaid balance. All outstanding call monies except a parcel of 20,000 shares were received by 31 October 2021. The directors decided to forfeit the 20,000 shares on the same date. On 15 November 2021, the forfeited shares were reissued as fully paid ordinary shares for a consideration of $8.50 per share. The constitution allows for the refund of any balance in the forfeited shares account after reissue to former shareholders.

Required:

Problem 1: Prepare journal entries to record all of the above events.