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At 30 June 2009, the equity of Tijuana Ltd was as follows

At 30 June 2009, the equity of Tijuana Ltd was as follows
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At 30 June 2009, the equity of Tijuana Ltd was as follows: 800,000 ordinary “A” shares issued at $2.00, fully paid $1,600,000 600,000 ordinary “B” shares issued at $2.00, called to $1.20 720,000 100,000 6% preference shares issued at $1.50, fully paid 150,000 Share options issued at $0.60, fully paid 48,000 Retained earnings 636,000 The options were exercisable before 1 March 2010. Each option entitled the holder to acquire two ordinary “C” shares at $1.80 per share, the amount payable when the option was exercised. The following transactions occurred during the year ended 30 June 2010. 2009 15 August The preference dividend and the final ordinary (both A Ordinary and B Ordinary) dividend of 16c per fully paid share had been declared on 30 June 2009. They were now paid. The directors have authority to authorize the payment of dividends. 1 October A 1-for-5 renounceable rights offer was made to ordinary “A” shareholders at an issue price of $1.90 per share. The expiry date on the offer was 30 November 2009. The issue was underwritten at a commission of $6,000. 31 October Holders of 640,000 A Ordinary shares accepted the rights offer, paying the required price per share, with the renounced rights being taken up by the underwriter. Ordinary “A” shares were issued. 10 November The underwriter paid the money due on the shares. 10 November The company paid the underwriter the commission owing. 2010 9 February The directors transferred $70,000 from retained earnings to a general reserve. 1 March 140,000 ordinary “C” shares were issued as a result of options being exercised. Options not exercised lapsed. 30 June The directors declared dividends on A, B and C ordinary shares of 20c per share, to be paid on 30 September 2009. The directors have authority to authorize the payment of dividends. Required: Prepare general journal entries to record the above transactions. Include narrations. NOTE: This question is NOT our property; we are only suggesting solution of this question.

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