Prepare the journal entries to record the receipt

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Problem - Gross Limited released a prospectus seeking 100000 ordinary shares. The prospectus required investors to pay 80 cents on application, 70 cents on allotment and a call of 60 cents Applications for 100000 shares were received on 1 July and the shares were allotted on 2 August. The allotment money was received on 3 September. A call was made on 4 October and the call money was received on 5 November.

-Prepare the journal entries to record the above transactions.

-Assume the above information, except on 1 July applications were received for 123 000 shares. The prospectus allowed Gross to reject any application the company deemed inappropriate and to scale back other applications and apply the excess application money to allotment. Gross rejected applications for 13000 shares, refunding the money to the applicants, and scaled back one application for 30 000 shares to 20 000 shares, applying the excess application money to allotment.

-Prepare the journal entries to record the receipt of the application money, the refund, the issue of shares and the receipt of the allotment money for the above transactions.

Reference no: EM132909471

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