ACCY112: Accounting In Organisations - Accounting and Finance Assignment Help

Assignment Task

Task

Jamaica Ltd was incorporated on 1 July 2021 and on the same day, the company purchased the net assets of Smart Corporation by issuing 120 000 ordinary shares at a price of $8 per share.The shares were fully paid.On 5 August 2021, the company issued a prospectus to the public, offering;

When applications closed on 30 August 2021, applications had been received for 120,000 preference shares and 355,000 ordinary shares, including one applicant for 25,000 ordinary shares who had paid in full. 

On 12 September 2021, the directors allotted the shares as follows;

1. Preference shares: the successful applicants were allotted the preference shares.

2. Ordinary shares:

i. 25,000 ordinary shares were allotted to the applicant who paid for the shares in full.

ii. Applicants for 15,000 ordinary shares were refunded their application money in full.

iii. The remaining applicants were allotted 5 ordinary shares for every 7 shares applied for. The excess application money on these shares was to be offset against the amount payable on allotment. 

The share issue costs, for ordinary shares, were $3,200 and were paid on 20 September 2021.

All allotment money was received by 25 September 2021 including the amount due from the underwriter. The underwriting commission was paid on this date.

The two calls were made on the dates stated in the prospectus, and a month after each call,moneys were received, except that the holders of 15,000 ordinary shares who did not pay either calls.

In addition, a holder of another 10,000 ordinary shares did not pay the second call.

Required: 

Prepare the required general journal entries to record the above transactions, including any necessary workings.

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