Reference no: EM132530553

Question - On 1 July 2019, Vajra Ltd was incorporated and offered 2,500,000 ordinary shares to the public at an issue price of $4.00 per share, with $1.50 payable on application, and $1.50 upon allotment (due within one month of allotment) and $1.00 payable on another call to be made at a later date.

The issue is underwritten at a commission of $42,000.

By 31 July 2019, applications had been received for 2,450,000 shares. On 12 August 2019, shares were allotted, and the underwriter forwarded the application and allotment money due on the 50,000 shares less their commission. All remaining allotment money was received by 12 September 2019. On 30 September 2019, Vajra Ltd paid the legal costs (for company formation) of $6,200 and share issue cost of $4,600.

On 20 January 2020, the call was made, with money due by 29 February 2020. By 29 February 2020, all call money was received except for holders of 35,000 shares who failed to meet the call. On 31 March 2020, the shares on which call money was not received were forfeited.

On 9 April 2020, the forfeited shares were auctioned for $3.70 as fully paid. Share re-issue costs amounting to $8,500 were paid. The constitution provides for any surplus on resale, after satisfaction of unpaid instalments and any costs, to be returned to shareholders whose shares were forfeited. The refunds were made on 5 May 2020.

Required - Prepare the journal entries to record the transactions of Vajra Ltd up to and including that which took place on 30 June 2020. Show all relevant dates, narrations and workings.