Reference no: EM132972113
Problem 1: Wind-Turbines, Inc., [WT] is authorized to issue 600,000 common shares. It issued subscriptions for 75,000 common shares at $27 per share on February 1, 2017. It required subscribers to pay 30% on this date and the balance later on demand. Similar shares of the company were being traded in the market at $20 each on that date. The journal entry to record this transaction on February 1, 2017, would be
a. DEBIT-Cash [$4,860,000]; CREDIT-Common Shares Capital [$4,860,000].
b. DEBIT-Share Subscriptions Receivable [$1,417,500]; DEBIT-Cash [$607,500]; CREDIT-Common Shares Subscribed [$2,025,000].
c. DEBIT-Share Subscriptions Receivable [$11,340,000]; DEBIT-Cash [$4,860,000];
CREDIT-Common Shares Subscribed [$16,200,000].
d. DEBIT-Share Subscriptions Receivable [$11,340,000]; DEBIT-Cash [$4,860,000];
CREDIT-Common Shares Capital [$16,200,000].
e. None of the above
Problem 2: WT calls for the final instalment on August 1. The remaining subscribers, who were in good standing, paid the amounts due. Thereafter on August 15, 2019, WT issues the common shares due to the remaining subscribers. The entry to record only this issue of the shares would be
a. DEBIT-Share Subscriptions Receivable [$16,200,000]; CREDIT-Common Share Capital [$16,200,000].
b. DEBIT-Common Shares Subscribed [$16,200,000]; CREDIT-Common Shares Capital [$16,200,000].
c. DEBIT-Share Subscriptions Receivable [$2,007,450]; CREDIT-Common Shares Capital [$2,007,450].
d. DEBIT-Common Shares Subscribed [$2,007,450]; CREDIT-Common Shares Capital [$2,007,450].
e. None of the above entries.
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