Reference no: EM132697525

Beta Ltd was registered on 1 July 2016. The same day, a prospectus was issued calling for applications for 500,000 ordinary shares at an issue price of $4, payable $2 on application, $1 on allotment and the balance of $1 on call. Applications closed on 31 August 2016, and the company had received applications for 510,000 shares at $2 each. On 1 September 2016, the directors allotted (allocated) shares to successful applicants, and refunded money to those who were not successful. All allotment money was received by 31 October 2016. On 15 January 2017, the call of $1 was made on the shares. All call money was received by 28 February 2017, except that owing on 4,000 shares. The non-payment of the call on the 4,000 shares resulted in the forfeiture of those shares. To maintain the current number of shares on issue, the forfeited shares were sold to Mr Wealthy on 31 March at a discounted price of $3.50 per share (recorded as paid to $4.00 each). Costs associated with this share issue totalled $2,500, and were paid in cash. On 30 April, the former shareholder was given a refund for the amount remaining in the forfeited shares liability account.

Problem 1: Prepare journal entries for Beta Ltd to record the above transactions.