Mark Limited was incorporated on1 January 2019. Authorised share capital was:- 1 000 000 ordinary shares, and- 500 000 8% preference shares.By 31 July 2019, Mark Limited had the following in issue:- 500 000 ordinary shares,………………...R500 000 ordinary share capital, and- 250 000 8% preference shares………….R500 000 preference share capitalAll the above have been recorded correctly.During the period 1 January 2020 to 30 June 2020 the following issue of shares tookplace.202017 Jan250 000 ordinary shares were advertised and offered to the public at aprice of R1,00 each. 50 000 8% preference shares were also offered tothe public at R2,00 each. The offer expires on 30 April 2021. These offerswere underwritten by Badge Finance for a commission of 4,5%30 AprilApplications were received from the public for 230 000 ordinary sharesand 49 000 8% preference shares20 MayShares were allotted to the public as well as the Underwriter31 MayThe account with the Underwriter was settled2 JuneShare issue expenses of R12 500 were paid Record the above transactions in the general journal relating to the above issues of boththe ordinary shares and preference shares

Journal entry shows the recording of transactions during an accounting year and every transaction…

Answered: Mark Limited was incorporated on1…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 5MC

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Mark Limited was incorporated on1 January 2019. Authorised share capital was:
- 1 000 000 ordinary shares, and
- 500 000 8% preference shares.
By 31 July 2019, Mark Limited had the following in issue:
- 500 000 ordinary shares,………………...R500 000 ordinary share capital, and
- 250 000 8% preference shares………….R500 000 preference share capital
All the above have been recorded correctly.
During the period 1 January 2020 to 30 June 2020 the following issue of shares took
place.

2020 17 Jan	250 000 ordinary shares were advertised and offered to the public at a price of R1,00 each. 50 000 8% preference shares were also offered to the public at R2,00 each. The offer expires on 30 April 2021. These offers were underwritten by Badge Finance for a commission of 4,5%
30 April	Applications were received from the public for 230 000 ordinary shares and 49 000 8% preference shares
20 May	Shares were allotted to the public as well as the Underwriter
31 May	The account with the Underwriter was settled
2 June	Share issue expenses of R12 500 were paid

Record the above transactions in the general journal relating to the above issues of both
the ordinary shares and preference shares

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