Question - On 1 January 2013, Crown Ltd released disclosure document stating 500,000 shares issuing at a price of $4.00 per share, payable $2.00 on application, $1.00 on allotment and $1.00 on a call to be made two months after the date of allotment.
By 31 January, applications were received for 550,000 shares. On 3 February, directors allotted 500,000 shares to the applicants in proportion to the number of shares applied for. The constitution gives the directors the power to apply all excess application monies to allotment. All other allotment monies were received by 15 February. Share issue costs of $1,400 were also paid on the same date.
The call was made on 3 April with the money due on 15 April. Holders of 10,000 shares did not pay the call monies. On 25 April 2013, as provided by the company's constitution, the directors forfeited the 10,000 shares on which the calls were unpaid.
On 1 May 2013, the forfeited shares were reissued as fully paid to $4.00 for a consideration of $2.50 per share. Costs of forfeiture and reissue amounted to $1,000. The constitution kept silent regarding forfeited shares. Monies were received 15 May 2013.
Required: Provide the journal entries to record the transactions of Crown Ltd in accordance with the details provided above. (Narrations are required).