Medium Problem 8-4. Subscriptions in Default On July 1, 2014, the Big Marketing Company was granted...

 

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Medium Problem 8-4. Subscriptions in Default On July 1, 2014, the Big Marketing Company was granted a charter authorizing it to issue 100,000 shares of P40 par value ordinary shares. During the next several months the corporation completed the following capital stock transactions: July 5 Received subscriptions for 6,000 shares of ordinary shares at par value from various subscribers. The subscribers paid one third of the subscription price as a down payment, agreeing to pay the balance in two equal monthly installments. 25 Received additional subscriptions from Rukia for 1,000 shares of ordinary shares at P44 per share with full payment due in two months. 224 Aug. 5 Received the ordinary share subscription installment from various subscribers of July 5 due on 5,850 shares. But one of the subscribers of July 5, Mr. Kirin, the subscriber to the 150 shares, failed to pay his first installment. After on week, the board of directors adjudged it as in default. 23 The shares in default was to be auctioned by the company. Paid P500 to advertise the auction. Oct. 24 The highest bidder, Mr. Iruka, paid the unpaid subscription and advertisement paid in full. Sept. 5 15 Issue the stock certificate 100 shares for Mr. Iruka and 50 shares for Mr. Kirin. Received the installment due for 5,850 shares and issued the stock certificate. Received subscription from Miss Ara for 100 shares of ordinary shares at P44 and paid 50%, the balance is due at the end of the month. 30 Miss. Ara was not able to pay and his subscription became delinquent. She was given thirty days to pay. And she will be charged a 12% interest from September 30. 30 Still, Miss. Ara was not able to pay. The board of directors decided to forfeit the shares and reimbursed Miss Ara for her payment, less interest for 30 days. The stock was reverted to unissued. Task: Using the Memorandum entry method prepare journal entries to record the above transaction (without explanations) Medium Problem 8-4. Subscriptions in Default On July 1, 2014, the Big Marketing Company was granted a charter authorizing it to issue 100,000 shares of P40 par value ordinary shares. During the next several months the corporation completed the following capital stock transactions: July 5 Received subscriptions for 6,000 shares of ordinary shares at par value from various subscribers. The subscribers paid one third of the subscription price as a down payment, agreeing to pay the balance in two equal monthly installments. 25 Received additional subscriptions from Rukia for 1,000 shares of ordinary shares at P44 per share with full payment due in two months. 224 Aug. 5 Received the ordinary share subscription installment from various subscribers of July 5 due on 5,850 shares. But one of the subscribers of July 5, Mr. Kirin, the subscriber to the 150 shares, failed to pay his first installment. After on week, the board of directors adjudged it as in default. 23 The shares in default was to be auctioned by the company. Paid P500 to advertise the auction. Oct. 24 The highest bidder, Mr. Iruka, paid the unpaid subscription and advertisement paid in full. Sept. 5 15 Issue the stock certificate 100 shares for Mr. Iruka and 50 shares for Mr. Kirin. Received the installment due for 5,850 shares and issued the stock certificate. Received subscription from Miss Ara for 100 shares of ordinary shares at P44 and paid 50%, the balance is due at the end of the month. 30 Miss. Ara was not able to pay and his subscription became delinquent. She was given thirty days to pay. And she will be charged a 12% interest from September 30. 30 Still, Miss. Ara was not able to pay. The board of directors decided to forfeit the shares and reimbursed Miss Ara for her payment, less interest for 30 days. The stock was reverted to unissued. Task: Using the Memorandum entry method prepare journal entries to record the above transaction (without explanations)

Answer rating: 100% (QA)

JOURNAL ENTRIES 5Jul Cash AC Dr 6000 X 40X 13 80000 Subscriptions receivable Ac Dr 6000 X 40 X 13 16... View the full answer