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Smiley Ltd issues 1,000 shares at $5 on 1 July 2019, with the terms of issue...

Smiley Ltd issues 1,000 shares at $5 on 1 July 2019, with the terms of issue requiring the shareholders to pay $3 immediately and $2 in one year’s time. After one year, the company makes a call on the shareholders for the remaining $2 per share, with payments to be made by 31 July 2020. Holders of 950 shares pay the required call by 31 July 2020. On 5 August 2020, the company forfeits the shares on which the call was not paid.

Prepare the journal entries for the following dates:

a) 1 July 2019 for issuance of shares and call for $2 on 1,000 shares

b) 31 July 2020 on receipt of call money

c) 5 August 2020 for the forfeiture of shares

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