Reference no: EM132667060

At 30 August 2019, the equity of Koala Ltd consisted of the following:

200 000 ordinary shares issued at $1, paid to $0.80            $160 000

50 000 preference shares issued at $1.20, paid to $0.90          45 000

Share issue costs     (10 000)

Retained earnings     (60 000)

Total equity           $135 000

• On 1 September, a call of $0.30 per share was made on the issued preference shares. All call money was received by 30 September.

• On 1 October, the company called for final payment on the issued ordinary shares and the holders of 180,000 shares made the payment that due on 30 October. On 10 November, the directors decided to forfeit the remaining 20,000 shares. On 15 November, the directors decided to reissue the 20,000 shares as fully paid for a consideration of 90 cents per share. By 30 November 2019, all monies were received. The cost of reissuing is $3,000. The constitution allows the company to retain any balance in the forfeited shares account after reissue.

Required:

Problem 1: Prepare general journal entries to record the above transactions of Koala Ltd. Narrations are NOT required.