Corona Ltd announced all shares on which the call of $1/share due for payment on 1...
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Corona Ltd announced all shares on which the call of $1/share due for payment on 1 September 2020, remains unpaid, will be sold by public auction on 1 November 2020. • 500 000 shares were forfeited the forfeited shares were all paid to $1.50 per share • all the shares were sold at the auction for $2.20 per share and will be credited to $2.50 • costs of forfeiture and reissue amounted to $5000 • the balance of the Forfeited Shares account will be refunded to the former shareholders. Required • Prepare journal entries to record the forfeiture and reissue above. • Discuss the benefits to a company from forfeiting and reissuing shares. Corona Ltd announced all shares on which the call of $1/share due for payment on 1 September 2020, remains unpaid, will be sold by public auction on 1 November 2020. • 500 000 shares were forfeited the forfeited shares were all paid to $1.50 per share • all the shares were sold at the auction for $2.20 per share and will be credited to $2.50 • costs of forfeiture and reissue amounted to $5000 • the balance of the Forfeited Shares account will be refunded to the former shareholders. Required • Prepare journal entries to record the forfeiture and reissue above. • Discuss the benefits to a company from forfeiting and reissuing shares.
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Answer rating: 100% (QA)
Journal Entries Particulars Debit Credit Share Capital Account Dr 1250000 To Calls in Arrears 5... View the full answer
Related Book For
Auditing The Art And Science Of Assurance Engagements
ISBN: 9780136692089
15th Canadian Edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan, Joanne C. Jones
Posted Date:
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