How lubradite would make entry when default occur

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Assume that ABC Corp. offers shares on a subscription basis to selected individuals, giving them the right to purchase 10 common shares at a price of $20 per share. Fifty individuals accept the company's offer and agree to pay 50% down and the remaining 50% at the end of six months. ABC Corp's entries would be as follows:

Question 1: When the final payment is received and the shares are issued, the entries are:

Question 2: Assume that a subscriber to 50 Lubradite common shares defaults on the final payment. If the subscription contract stated that amounts paid by the defaulting subscriber would be refunded, Lubradite would make the following entry when the default occurs, assuming that the refund was to be paid at a later date

Reference no: EM132579971

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