Reference no: EM132917233

Question - Beauty Bhd with an authorized capital of 50,000,000 in ordinary shares of RM2 each had a balance of RM60,000,000 in its share capital account and decided to issue 20,000,000 shares to the public at a price of RM2.20 payable as follows:

On application 40 sen

On allotment 60 sen (including premium)

On 1st call 60 sen

On 2nd call 60 sen

Application was received for 40,000,000 shares and the directors decided to deal with these as follows:

i. To refuse allotment for applications of 10,000,000 shares

ii. To give full allotment for applicants of 10,000,000 shares and

iii. To allot the remainder on a pro rata basis

The surplus monies received on application were applied to the amounts due on allotment. The balance of allotment monies was received, together with those from shareholder who held 4,000,000 shares who also paid his 1st and 2nd call monies.

The 1st call was duly paid. One of the shareholders who held 2,000,000 shares defaulted the 2nd call payment. A resolution was passed and these shares were forfeited. The forfeited shares were reissued to Tinkerbell for 0.70 cents, each paid to RM1.40. The 2nd call was made and all monies were duly paid by the shareholders.

Required - Record the above share issuance transaction in the appropriate journal.