Reference no: EM132011092
Problem - On 1 August 2013 stamford Ltd issued a prospectus inviting public subscriptions for an issue of 200,000 ordinary shares at a price of $1.80 per share, payable $1 on application, 50 cents on allotment, and the balance as and when required. The issue was underwritten at a commission of $1,500.
When applications closed on 1 September 2013, applications had been received for 250,000 shares. On 2 September the directors allotted the shares on a "first come basis, with applications for the last 50,000 shares that were received being rehected. The unsuccessful applicants had their application money refunded on 5 September
By 30 September 2013 all outstanding allotment money had been received.
On 30 March 2014 a call for the remaining 30 cents per share was made, with the money being due by 30 April 2014 All call money was received, with the exception of those due from the holder of 5,000 shares. Following a further letter from the company and the continued failure to pay the call, the 5,000 shares were forfeited on 30 May. The company's constitution required money paid on forfeited shares to be refunded.
On 15 June 2014 the forfeited shares were reissued to a new shareholder fully paid to $1.80. The new shareholder was only required to pay $1.30 per share. Costs of reissue totalling $300 were paid on that date. The balance in the Forfeited Shares shareholder on 20 June 2014 Reserve was refunded to the former shareholder on 20 June 2014
Required: Prepare the journal entries from 1 Aug 2013 to 20 June 2014.