Share issue and forfeited shares

Share issue and forfeited shares

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On 1 January 2013, Crown Ltd released disclosure document stating 500,000 shares
issuing at a price of $4.00 per share, payable $2.00 on application, $1.00 on allotment
and $1.00 on a call to be made two months after the date of allotment.
By 31 January, applications were received for 550,000 shares. On 3 February,
directors allotted 500,000 shares to the applicants in proportion to the number of
shares applied for. The constitution gives the directors the power to apply all excess
application monies to allotment. All other allotment monies were received by 15
February. Share issue costs of $1,400 were also paid on the same date.
The call was made on 3 April with the money due on 15 April. Holders of 10,000
shares did not pay the call monies. On 25 April 2013, as provided by the company’s
constitution, the directors forfeited the 10,000 shares on which the calls were unpaid.
On 1 May 2013, the forfeited shares were reissued as fully paid to $4.00 for a
consideration of $2.50 per share. Costs of forfeiture and reissue amounted to $1,000.
The constitution kept silent regarding forfeited shares. Monies were received 15 May
2013.
Required:
Provide the journal entries to record the transactions of Crown Ltd in
accordance with the details provided above.
(Narrations are required)

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