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Prepare journals to record the transactions

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Reference no: EM133015564

Question - Digger Ltd owns a mining site in Northern Queensland. The company is ready to undertake development of the site. On 15 November, Digger Ltd invited the public to subscribe to the issue of 3,000,000 shares for $2.25 per share. $1.25 is payable on application, $0.55 is payable on allotment and $0.45 is payable on call.

Applications closed on 20 December with monies received deposited to a cash trust account. The shares were allotted on 1 January.  All allotment money was received by 31 January. Later, the company required additional funds to meet capital expenditure commitments. The outstanding capital of $0.45 per share was called on 1 May with all call monies received by 31 May.

Required - Prepare journals to record the following transactions related to the equity of Digger Ltd.

(a) the allotment of shares on 1 January.

(b) the call made on the shares on 1 May and the receipt of call monies by 31 May.

Reference no: EM133015564

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