Reference no: EM132070448

Question - Share capital of Parsley Ltd at 31 March 2014 was as follows: 200 000 ordinary shares at an issue price of $5 each paid to $3, and 50 000 preference shares at an issue price of $2 each paid to $1. At that date, a further call of $2 on ordinary shares and $1 on preference shares was made. During the 3 months to 30 June 2014, all calls were duly received except those on 1000 preference shares which were forfeited as at 30 June 2014.To bring capital back to the original amount of issued capital, the forfeited shares were offered to an investment company at a price of $1.80 per share paid to $2 and the transfer was completed on 30 September 2014. According to the company's constitution, shareholders' equity in forfeited shares must be refunded to them. On 31 October, the previous owner of forfeited shares received a refund cheque for the amount due, less selling costs of $500.

Required: Show journal entries to implement the above transactions.