Lowball, Inc., entered into a subscription contract - 14652

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  • Posted on: Sat 03 Nov, 2012
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Request Description

 

 

                 Exhibit 6

Lowball, Inc., entered into a subscription contract with several subscribers that calls for the purchase of 2,000 shares of $5 par common stock for $15 a share. The contract calls for a 20% down payment and specifies that any amounts not paid within the contract period will be forfeited in full.

            Refer to Exhibit 6. The initial entry to record this subscription and the down payment would include a

 

Answer

 

credit to Common Stock Subscribed for $10,000

 

credit to Additional Paid-in Capital from Subscribed Stock for $10,000

 

debit to Subscriptions Receivable: Common Stock for $30,000

 

debit to Cash for $2,000

 

Solution Description

 

                 Exhibit 6

Lowball, Inc., entered into a subscription contract with several subscribers that calls for the purchase of 2,000 shares of $5 par common stock for $15 a share. The contract calls for a 20% down payment and specifies that any amounts not paid within the contract period will