Exhibit 15-2
Lawrence, Inc., entered into a subscription contract with several subscribers that calls for the purchase of 2,000 shares of $5 par common stock for $15 a share. The contract calls for a 20% down payment and specifies that any amounts not paid within the contract period will be forfeited in full.
-Refer to Exhibit 15-2. The initial entry to record this subscription and the down payment would include:
A) a credit to Common Stock Subscribed for $10,000.
B) a credit to Additional Paid-in Capital from Subscribed Stock for $10,000.
C) a debit to Subscriptions Receivable: Common Stock for $30,000.
D) a debit to Cash for $2,000.

Question

Quizplus · Accepted Answer

The initial entry would include a credit to Common Stock Subscribed for the par value of the shares, which is 2,000 shares x $5 par value = $10,000.

Exhibit 15-2 Lawrence, Inc., Entered into a Subscription Contract with Several Subscribers