Signal Ltd Called for Subscriptions for 8 Million Shares

question 2

Multiple Choice

Signal Ltd called for subscriptions for 8 million shares. The issue price per share is $3.50 to be paid in three parts: the first payment of $1.00 is to be made on application, $1.50 is to be paid within 1 month of allotment and the remaining $1.00 is to be paid within 3 months of allotment. At the end of July, when applications close, applications for 10 million shares have been received. The shares are allotted on 1 August on a pro rata basis with the excess application money to be applied against the amount due on allotment. The first and final call on the shares is made on 1October. Assume all amounts on allotment and call are paid by the due date. What are the accounting entries to record these events?

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