On 1 July 2019, Grafton Ltd was incorporated, and on 4 July a prospectus was issued inviting applications for 80 000 shares payable $4.50 on application, $2.50 on allotment and $2.50 on each of two calls to be made at intervals of 3 months after the date of allotment.

By 31 July, applications were received for 96 000 shares. On 3 August, the directors allotted 80 000 shares to the applicants in proportion to the number of shares for which application had been made. The surplus application money was offset against the amount payable on allotment.

The balance of allotment money was received by 12 August. The two calls were made on the dates stated in the prospectus, but the holders of 4800 shares did not pay either call. In addition, a holder of another 2400 shares did not pay the second call.

Required

(a) Prepare journal entries to record the above transactions (in general journal format).

(b) Prepare the equity section of the balance sheet of Grafton Ltd on completion of the transactions.