Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

Two Problem show steps please REMEMBER TO SHOW ALL YOUR WORK FOR PARTIAL CREDIT

ID: 2545343 • Letter: T

Question

Two Problem show steps please

REMEMBER TO SHOW ALL YOUR WORK FOR PARTIAL CREDIT On January 1, Safe-T Enterprises entered into a subscription contract for 1,000 shares of $10 par common stock at a price of $50 per share. The contract required an immediate down payment of $30 per share with the remaining $20 per share due on February 1. The stock will be issued to each subscriber upon full payment . Required: Prepare the journal entries to record the following: a. Receipt of the down payment and signing of the contract on January b. Receipt of the remaining balances on February 1 from subscribers to 1,000 shares, the market price on February 1 is $60

Explanation / Answer

1. Journal Entries

Date

Account Title and Explanations

Debit

Credit

Jan 1

Subscription receivable (1,000 * 50)

50,000

Common stock subscribed (1,000 * 10)

10,000

Additional paid in capital in excess of par (1,000*40)

40,000

(to record the common shares subscribed)

Jan 1

Cash

30,000

Subscription receivable (1,000 *30)

30,000

(to record the down payment)

Feb 1

Cash (1,000 * 20)

20,000

Subscription receivable

20,000

(to record the remaining amount received)

Feb 1

Common stock subscribed

10,000

Common stock

10,000

(to record the common stock issued)

2. Journal Entries

Date

Account Title and Explanations

Debit

Credit

Mar 1

Treasury Stock (2,000 *15)

30,000

Cash

30,000

(to record reacquisition of shares)

Apr 1

Cash (1,000 *16)

16,000

Treasury stock (1,000 *15)

15,000

Additional paid in capital– treasury stock (1,000 * (16-15)

1,000

(to record reissue of shares acquired)

May 1

Cash (500 *14)

7,000

Additional paid in capital – treasury stock (500* (15-14))

500

Treasury stock (500*15)

7,500

(to record reissue of shares acquired)

Jun 1

Common stock (500 *5)

2,500

Additional paid in capital in excess of par : Common stock ( 500 * (12-5) )

3,500

Additional Paid in capital- treasury stock (1000 -500)

500

Retained earnings

1,000

Treasury stock (500 *15)

7,500

(to record the retirement of shares acquired and the loss on the retirement)

Note:

Loss on the retirement of shares first adjusted towards the balance in additional paid in capital- treasury stock balance and then balance amount if any remains debited to the retained earnings

Date

Account Title and Explanations

Debit

Credit

Jan 1

Subscription receivable (1,000 * 50)

50,000

Common stock subscribed (1,000 * 10)

10,000

Additional paid in capital in excess of par (1,000*40)

40,000

(to record the common shares subscribed)

Jan 1

Cash

30,000

Subscription receivable (1,000 *30)

30,000

(to record the down payment)

Feb 1

Cash (1,000 * 20)

20,000

Subscription receivable

20,000

(to record the remaining amount received)

Feb 1

Common stock subscribed

10,000

Common stock

10,000

(to record the common stock issued)

Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote