On 1st July 2016, Oregano Ltd was registered and offered 1000000 ordinary shares to the public at an issue price of $6, payable as follows;

$3 on application (due 15th August)

$2 on allotment (due 15th September)

$1 on final call

The issue was underwritten at a commission of $8000. By 15th August, applications had been received for 1200000 ordinary shares of which applications for 200000 shares forwarded the full $6 per shares, the remainder paying only the application money.

At a directors meeting on 16th August, it was decided to allot shares in full to applicants who had paid the full amount and proportionally to all remaining applicants.

According to the company's constitution, all surplus money from application can be transferred to allotment and /or call accounts.

The underwriting commission was paid on 28th August. Other share issue costs of $6000 were also paid on this date. All outstanding allotment money was received by the due date.

The final call was made on 1st November with money due by 30 November. All money was received on the due date except for the holder of 30000 shares who failed to meet the final call. On 7th December as provided for in the constitution, the directors decided to forfeit these shares. They were reissued on 15th December as paid to $6.00 for $5.60 cash. The balance of forfeited shares account was returned to the former shareholder on 16th December.

Required:

Prepare the journal entries to record the transactions of Oregano Ltd up to and including that which took place on 16 December 2016. (Show all workings.

Answer rating: 100% (QA)

To record the transactions of Oregano Ltd up to and including December 16 2016 we need to create journal entries for each transaction Here are the jou... View the full answer