Second marking Question 1 On 1 March 2021, ABC Ltd was registered and a prospectus was issued inviting applications for 1,000,000 ordinary shares at an issue price of $4. The ordinary shares were payable $2 on application and $2 on allotment (due 30 April). The prospectus also invited 50,000 10% redeemable preference shares at $2, fully payable on application. The issues were underwritten at a commission of $6,500. The underwriter agreed to buy any unsold shares in the case of undersubscription. By 31 March 2021, applications had been received for 1,300,000 ordinary shares and 35,000 preference shares. On 1 April 2021, 1,000,000 ordinary shares were issued. The constitution allows the directors to apply excess application money of the ordinary shares to the allotment account. On 2 April 2021, 50,000 preference shares were issued. All outstanding allotment money was received by the due date. On the same date, the underwriter paid amounts due less commission. On 1 October 2021, ABC Ltd offered additional ordinary shares to ordinary shareholders through a 1 for 10 rights issue. The terms of the rights issue included an issue price of $3.50 per share. All ordinary shareholders took up the offer. On 1 November, the preference shares were redeemed out of profits at a 5% premium, with payment to former shareholders made on 2 November. The shares had been classified as equity in the financial statements. Required Prepare the journal entries to record the transactions of ABC Ltd for the events outlined above. Narrations are not required. (Total = 11 marks) ia) Focus