Question

On 1 July 2020, PK Ltd issued a prospectus inviting applications for 300 000 ordinary shares,
at an issue price of $7, payable $2.50 on application, $1.50 on allotment, and $3 on future
call(s), dates to be determined by the directors. By 1 September, applications were received
for 310 000 shares with $2.50 paid per share. On 6 September, the directors allotted 300 000
shares. Refunds were made to applicants for 10 000 shares. Share issue costs of $2 400 were
also paid on the same date. All of the allotment money was received by 1 October. On 1
February 2021, a first and final call for $3 was made. All of the call money was received by 1
March 2021.
Required
Prepare journal entries to record the above transactions.

Answer 1

ANSWER:

sept 1 bank a/c..............dr 775,000

to equity share application a/c 775,000

equity share application a/c.................dr 25000   

to bank a/c 25000

(excess money refunded)

equity share application a/c...............dr 750000

to equity share capital a/c 750000

sept 6 equity share allotment a/c..................dr 900000   

to equity share capital a/c 900000

oct 1 bank a/c.........................dr 450000

to equity share allotment a/c 450000

feb 1v2018 equity share first and final call a/c.............dr 900000

to equity share capital a/c 900000

mar 1 bank a/c....................dr 900000

to equity share first and final call a/c 900000

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