Flynn Ltd is undergoing a period of significant growth and needed to raise capital. lt has done this by issuing ordinary shares, preferences shares and debentures to the public. Flynn Ltd has a 31 January Year end. The following information is relevant: 1) On 1 February 2018 Flynn Ltd had 10 000 000 authorised and 1 000 000 issued ordinary shares. Ordinary shares have a par value of N$2,95 each. On this date the share premium and retained earnings had a balance of nil and N$1 200 000 respectivelY. 2) On 28 February 2018 Flynn Ltd decided to issue all the remaining authorised shares. Boltic Brokers Ltd underwrote the shares issue in return for a 3o/o underwriting commission. Flynn Ltd notified shareholders that it would issue ordinary shares for N$3 each. 3) By 31 March 2018, the closing date of the application, Flynn Ltd had received N$4 500 000 from applicants. The maximum number of shares was duly issued on 31 March 2O1g and Boltic Brokers Ltd was paid. Flynn Ltd's accounting policy for underwriter commission is to maximise distributable reserves whenever possible. 4) Flynn Ltd issued 3OO 0OO, N$2, 14o/o preference shares on 30 April 2018 at a 5% premium. This was the first time that Flynn Ltd had ever issued preference shares. Preference dividends are payable annually on 31 January, if declared. 5) Flynn Ltd issued 20, N$100 000 debentures that bear interest at 9o/o pet annum on 31 May 2018. lnterest on debentures is payable annually on 31 January. 6) On 15 January 2019 Flynn Ltd's board of directors were deciding how to distribute profits. lt was proposed that a distribution of N$2 400 000 be made to ordinary shareholders and no distribution to its debenture holders and preference shareholders. 7) Flynn Ltd made a profit of N$30 OOO OOO for the year ended 31 January 2019 before taking into account any of the information provided above' 8) At 31 January 2019 Flynn Ltd decided to convert its par value ordinary shares into no par value shares.

How to prepare the journal entries to account for all the transactions involved in issuing and conversion of the ordinary shares?

Answer rating: 100% (QA)

1 Journal entries 31032018 Bank Ac Share application Money Ac being share application Money received ... View the full answer