Prepare the journal entries in the records of white foam ltd

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White Foam Ltd has been investigating the expansion of the company into new areas of development. In order to fund these new investments the company needs an increase in equity. On 1 April 2016 the company decided to make a public issue to raise $1,320,000 for new capital development. The company issued a prospectus inviting applications for 440,000 $3.00 shares, payable in full on application. There was an additional incentive offered by White Foam Ltd to investors, as those shareholders who acquired more than 22,000 shares were allowed to acquire options at 46 cents each. These options allowed the investors to acquire shares in White Foam Ltd at $3.20 each, the acquisition having to occur before 30 November 2016.

White Foam Ltd had received applications for 501,100 shares and 44,000 options by 10 May. On 28 May the shares and options were allotted and money returned to unsuccessful applicants. All applicants who acquired options also received shares.

By 30 November 2016 the price of each of White Foam's shares was $3.39. Holders of 39,600 options exercised their options in November, with the remaining options lapsing.

Prepare the journal entries in the records of White Foam Ltd in relation to the above events.

Reference no: EM131073135

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