At the start of the financial year, Feebus Ltd had in issue 42 million ordinary shares valued at $18.9 million. In a bid to raise additional capital for the company, on March 31, 2022, the company executed a bonus issue on June 30, 2022, offering three shares for every eight held. The company then went on to execute a one for ten rights issue. The rights issue was done at a price of $0.80 per share. A few weeks later, the directors approved a regular issue of three million additional shares at par value. Finally, dividends of two cents per share were declared on September 30, 2022, the final day of the financial year, to be paid three months later.

Beyond the ordinary share capital, the company also commenced the year with $6.3 million and $2.6 million in its retained earnings and share premium accounts respectively.

REQUIRED:

Show the journal entries for each of the four transactions outlined, alongside all relevant workings.

You are required to indicate how many shares are in issue prior to each transaction being undertaken.

Answer rating: 100% (QA)

1 Initial Shares Issue 42 million ordinary shares issued at 189 million Journal Entry Debit Cash or Bank Account 189 million Credit Ordinary Share Cap... View the full answer