60.1K

Verified Solution

Link Copied!

To extend its vaccine production operation, ultimate vaccine ltd extends it operation in victoria by making a public offer its shares. in its prospectus, it notes that the shares are to issued at $18.00 per share. the shares are to be paid in three instalments. the first payment to be made on the application is $7.20. this second amount of $7.20 will be due within one month of allotment, and the third amount of$3.60 will be due within one month of the first and final call.

 

Ultimate vaccine ltd will seek to issue 4 million shares. The closing date for application is 31 august 2020 by the closing date application have been received for 5 million shares. To deal with the over subscription, ultimate vaccine ltd has decided to issue shares to all subscribers on a pro rata basic.

All amounts due on the allotment are paid by th due date. The first and final call for $3.60 was made on 30 November 2020, with the amounts being due by 31 December 2020 holders of 1 million shares fail to pay the amount due on the call by the due date and on the 15Jan 2021 these holders have their shares forfeited. The forfeited shares are auctioned on 15Feb 2021 an amount of $7.50 per share is received, the cost of holding the action is $18000, the shares are sold as fully paid.

 

Required

Provide the accounting journal entries necessary to account for the transactions and events for the above

Answer & Explanation Solved by verified expert

See Answer