Reference no: EM132903145

Delinquent Shares

• On January 1, 2020, FGG Corporation was authorized to issue 50,000 ordinary shares at a par value of P100 per share.
• The shares were offered to the public at a subscription price of P125.
• A subscription for a total of 10,000 shares was received from investors requiring a 25% downpayment with the balance payable in two (2) installments within six (6) months
• The subscribers paid the 1st installment on March March 31.
• On June 30, all paid in full except for Michael, a subscriber for 500 shares, who defaulted the company.
• The delinquent shares were advertised for public auction wherein P 1,375 was spent for advertising and legal expenses.
• Three (3) bidders responded to the announcement.

A bid was received as follows:

Ghean -400 shares

Linda-350 shares

Robert-300 shares.

The highest bidder paid on July 5 and the stock certificates were issued.

Required:

Problem 1: Journalize and post the above transactions using Memorandum Entry Method