ABC Ltd has the following equity balances at the end of June 2022. Share Capital A...

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ABC Ltd has the following equity balances at the end of June 2022. Share Capital A 200,000 shares issued at $5 paid to $3 = Share Capital B 100,000 shares fully paid @ $2 Total 25 Dec 2022 = $600,000 Prepare journal entries to account for the following transactions: 30 Nov 2022 The company makes a 1-for-2 rights offer to its 'B' ordinary shareholders. The rights are renounceable and allow holders to obtain 'B' ordinary shares for $3 per share, payable in full on application. SHOW ALL WORKINGS 200,000 $800,000 The holders of 20 000 'B' ordinary shares accept the rights offer by the expiry date. The shares are duly allotted and all money is received. A call of $2 per share is made on all 'A' ordinary shares. All call money except that owing by the holder of 9,000 shares is received by 31 January. Shares on which calls are unpaid are forfeited and cancelled, as per the company's constitution. ABC Ltd has the following equity balances at the end of June 2022. Share Capital A 200,000 shares issued at $5 paid to $3 = Share Capital B 100,000 shares fully paid @ $2 Total 25 Dec 2022 = $600,000 Prepare journal entries to account for the following transactions: 30 Nov 2022 The company makes a 1-for-2 rights offer to its 'B' ordinary shareholders. The rights are renounceable and allow holders to obtain 'B' ordinary shares for $3 per share, payable in full on application. SHOW ALL WORKINGS 200,000 $800,000 The holders of 20 000 'B' ordinary shares accept the rights offer by the expiry date. The shares are duly allotted and all money is received. A call of $2 per share is made on all 'A' ordinary shares. All call money except that owing by the holder of 9,000 shares is received by 31 January. Shares on which calls are unpaid are forfeited and cancelled, as per the company's constitution.

Answer rating: 100% (QA)

SOLUTION To account for the transactions described we will prepare the journal entries step by step ... View the full answer