n 2007, Xero Ltd. offered a subscription of 15 million shares at an offer price of $1.00 per share with the ability to accept oversubscriptions of up to $3 million. The prospectus detailed the requirement that all applications must be accompanied by payment in full for the total number of shares applied for and stated that application monies will be banked upon receipt into a designated bank account and held on trust pending the allocation of shares. Required: Assuming all 18 million shares were applied for, prepare the journal entry to record the receipt of application monies.  Apart from recording a cash inflow, explain whether Xero should also record another asset, a liability, revenue or an expense upon collection of application monies, and explain why.

Q1. Pheonix Limited made an offer to the public via a prospectus of 1,000,000 shares with an issue price of $1.00 per share. The shares were payable as $0.50 on application and a further $0.20 on allotment and $0.30 on call.  Applications closed on 1 March 2020 and 1,500,000 applications were received (an oversubscription of 500,000 shares). Allotment was made on 20 March 2020. The company allotted 1,000,000 shares and the excess application monies were retained against allotment and call amounts. The call money was due on 1 October 2020.  All monies to be paid have been received on time except 100,000 shareholders who could not pay the call money. These 100,000 shares were forfeited by the management on 20 November 2020.   Prepare the journal entries to record the above.

Sedunia Berhad was incorporated on 1 July 2020. On 1 August, it decided to issue 300,000 ordinary shares on the following terms: Application RM1 per share Allotment RM2 per share Call as required RM1 per share To the end of August, applications for 350,000 shares had been received together with the application money due on each share. One applicant for 5,000 shares had forwarded RM20,000 in full payment of the shares. On 15 September, the directors proceeded to allot 300,000 ordinary shares on the following basis. Applicants for 30,000 shares were refunded their application money in full, 5,000 shares were allotted to the applicant who paid for the shares in full, and the other successful applicants were allotted the remaining shares, excess application money being transferred to allotment. On 7 October, all allotment money had been received. A first and final call was made on 1 November, and all call money was received by 30 November with the exception of the amount due on 6,000…

Pheonix Limited made an offer to the public via a prospectus of 1,000,000 shares with an issue price of $1.00 per share. The shares were payable as $0.50 on application and a further $0.20 on allotment and $0.30 on call.  Applications closed on 1 March 2020 and 1,500,000 applications were received (an oversubscription of 500,000 shares). Allotment was made on 20 March 2020. The company allotted 1,000,000 shares and the excess application monies were retained against allotment and call amounts. The call money was due on 1 October 2020.  All monies to be paid have been received on time except 100,000 shareholders who could not pay the call money. These 100,000 shares were forfeited by the management on 20 November 2020.    Prepare the journal entries to record the above.