The shareholders' equity of Iraq Ltd on 1 January 2014 was: Share capital-200 000 shares fully...

 

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The shareholders' equity of Iraq Ltd on 1 January 2014 was: Share capital-200 000 shares fully paid General reserve $400 000 200000 Retained earnings 100000 The following transactions occurred during the year ended 31 December 2014: 1. On 1 February 2014, a tradable one-for-two rights issue was made to existing shareholders. The issue price was $2 per share, payable in full on application. The issue was underwritten for a commission of $5000. The issue closed fully subscribed on 31 March, with holders of 40 000 shares having transferred their rights. The underwriting commission was paid on 5 March. 2. On 30 June 2014, 10000 shares were privately placed with Asian Investments Ltd at $2 per share. Required Prepare the general journal entries to record the above transactions. The shareholders' equity of Iraq Ltd on 1 January 2014 was: Share capital-200 000 shares fully paid General reserve $400 000 200000 Retained earnings 100000 The following transactions occurred during the year ended 31 December 2014: 1. On 1 February 2014, a tradable one-for-two rights issue was made to existing shareholders. The issue price was $2 per share, payable in full on application. The issue was underwritten for a commission of $5000. The issue closed fully subscribed on 31 March, with holders of 40 000 shares having transferred their rights. The underwriting commission was paid on 5 March. 2. On 30 June 2014, 10000 shares were privately placed with Asian Investments Ltd at $2 per share. Required Prepare the general journal entries to record the above transactions.

Answer rating: 100% (QA)

1 Journal Entry Issue of Right Shares On 1 February 2014 to 31 March 2014 Application Period Debit Bank Cash AC 200000 Credit Right Share Application ... View the full answer