Diamonta Ltd Decided to Issue 200 000 Ordinary Shares for $2.10c

Diamonta Ltd decided to issue 200 000 ordinary shares for $2.10c each, payable in instalments, 40c on application, $1 on allotment and the balance payable at the discretion of the company. Applications were received for 220 000 shares. The shares were allotted by the directors at a meeting held a week after the close of applications. After refunding applications for 20 000 shares, which of the following is the correct journal entry to transfer the application money to the share capital account?

A) Debit application $88 000; credit trust bank account $88 000
B) Debit trust bank account $80 000; credit share capital account $80 000
C) Debit application $88 000; credit share capital $88 000
D) Debit application $80 000; credit share capital $80 000