Kary Inc decides to sell shares to raise added capital to allow for plant expansion. wary Incs
Question:
Kary Inc decides to sell shares to raise added capital to allow for plant expansion. wary Inc’s executives decide to issue shares through a subscription basis. Kary offers 30,000 common shares at $16 per share. The terms of the subscription are 25% down and the balance at the end of 4 months. Assume that only the down payment ismade and that the subscribers don’t pay the balance. The company has the policy of giving a refund for the amounts received.
Required:
Give journal entries for the following:
the original subscription
the collection of the down payment
the forfeiture of the balance
if the company did not offer a refund of the deposit nor did it issue any shares, what would the journal entry look like?
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson