Part A

(20 marks) On 1 July 2017, Julia Ltd issued a prospectus inviting applications for 500 000 ordinary shares, at an issue price of $5, payable $2.50 on application, $1.50 on allotment, and $1 on a future call, dates to be determined by the directors. By 1 September, applications were received for 520 000 shares with $2.50 paid per share. On 6 September, the directors allotted 500 000 shares. Refunds were made to applicants for 20 000 shares. Share issue costs of $9 000 were also paid on the same date. All of the allotment money was received by 1 October. On 1 February 2018, a first and final call for $1 was made. All of the call money was received by 1 March 2018.

Part B (10 marks) On 1 October 2017 Daniel Ltd issued a notice to the owners of 1000 000 $2 shares on which a call of 50c per share had not been paid that the shares would be forfeited on 1 November and sold to an institutional investor Assume the following: The shares were $2 shares All 1 000 000 shares were forfeited the forfeited shares were all paid to $1.50 per share all the shares were sold to the institutional investor for $1.80 per share and were credited as paid to $2.00 costs of forfeiture and reissue amounted to $4000 the balance of the Forfeited Shares account was refunded to the former shareholders. Required Prepare journal entries to record the above transactions.