Rum Ltd had 500,000 ordinary shares and 100,000 preference shares in issue at 31 December 2017. The

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Question:

Rum Ltd had 500,000 ordinary shares and 100,000 preference shares in issue at 31 December 2017. The annual preference dividend is $0.10 per share.

As business grows, Rum Ltd needed more working capital and decided to issue another 500,000 ordinary shares at $1.20 each. All monies had to be fully paid on application by 1 March 2018. Applications for 600,000 ordinary shares were received. Shares were allotted on 20 March 2018 on a pro-rated basis, and the excess application monies were returned to unsuccessful applicants on 22 March 2018.

Rum Ltd declared a total dividend of $60,000 on 30 September 2018.

Required:
Prepare journal entries (with narratives) to record the above transactio