Question

On August 3, 2016, the date of incorporation, Quinn Company accepts separate subscriptions for 1,000 shares of $100 par preferred stock at $104 per share and 9,000 shares of no-par, no-stated-value common stock for $22 per share. The subscription contracts require a 10% down payment, with the balance due by November 1, 2016. Shares are issued to each subscriber upon full payment. On November 1, Quinn received the remaining balances for the shares of preferred stock and common stock.

	Required:
	Prepare journal entries to record all the transactions related to:
1.	the preferred stock
2.	the common stock Preferred Stock should have 8 transactions, Common Stock should have 7 transactions.

Answer 1

Journal entry on date of 10% subscription received

Date	Description	Debit $	Credit $
1-Aug	Cash (2.2*9000)+(10.4*1000)	30,200
	Subscription receivable (19.8x9000)+(93.6*1000)	271,800
	Common stock		198,000
	Preferred stock a par		100,000
	Addition paid in capital		4000

Working notes for the answer:

Common stock =22x9000 =198000

Preferred stock =100x 1000 =100,000

Journal entry for balance due by November 1, 2016

Date	Description	Debit $	Credit $
1-Nov	Cash	271,800
	Subscription recivable (19.8x9000)+(93.6*1000)		271,800