Reference no: EM131287809

Y Ltd is listed on the Australian Securities Exchange. On 1 January 2015, Y Ltd invited Madi Ltd to purchase 700 000 shares at $2.50 per share. At the time of accepting the offer, Madi Ltd only had cash resources available of $900 000. The balance of the purchase price would be made up of future consulting services that Madi Ltd would supply to Y Ltd. By 30 June 2015, Madi Ltd had supplied $400 000 worth of services to Y Ltd. Services consumed by Y Ltd were used in the manufacture of Property, plant and equipment. In year 2014, the company had allotted one million shares for a price of $1.00 as partly paid to $0.50 per share. A call for the balance of the share price—$0.50—is made on 1 October 2015. By 1 December 2015, the holders of 900 000 shares have made the payment that is due on the call. The directors decide to forfeit the remaining 100 000 shares. The shares are reissued on 14 December 2015 as fully paid. The company receives $0.70 per share when the shares are reissued. The costs of conducting the sale amount to $500. The surplus amounts are returned to the original shareholders after payment of all the expenses associated with reissuing the shares. Y Ltd utilised the balance of the consulting services by 31 December 2015. Required: Provide the journal entries necessary to account for private placement and the call, forfeiture and subsequent reissue of shares in the year 2015.