Module 1

Exercise 2.4 SHARE ISSUE, OPTIONS

Prepare the journal entries in the records of Jordan Ltd in relation to the equity transactions in 2014.

JORDAN LTD

25/3 Cash trust – shares Dr 750 000

Application – shares Cr 750 000

(Applications for shares)

Cash trust – options Dr 10 000

Application – options Cr 10 000

(Applications for options)

2/4 Cash Dr 610 000

Cash trust – shares Cr 600 000

Cash trust – options Cr 10 000

(Transfer on issue of shares and options)

Application – shares Dr 600 000

Share capital Cr 600 000

(Issue of shares)

Application – shares Dr 150 000

Cash trust Cr 150 000

(Refund to unsuccessful applicants)

Application – options Dr 10 000

Options Cr 10 000

(Issue of options)

31/12 Cash Dr 63 000

Share capital Cr 63 000

(Issue of shares on issue of options)

Options Dr 10 000

Share Capital Cr 9 000

Options lapsed reserve Cr 1 000

(Transfer of lapsed options)

Exercise 2.6 ISSUE OF ORDINARY AND PREFERENCE SHARES

Prepare journal entries and ledger accounts to record the following transactions for Kuwait Ltd:

KUWAIT LTD

2015

01/4 NO ENTRY

10/4 Cash trust Dr 210 000

Application – ordinary shares Cr 210 000

(Applications for ordinary shares:

140 000 x $1.50)

Cash trust Dr 170 000

Application – preference shares Cr 170 000

(Applications for preference shares:

85 000 x $2)

15/4 Application – ordinary shares Dr 150 000

Share capital – ordinary Cr 150 000

(Issue of 100 000 shares at $1.50 each)...