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

Answer 1

Date	Accounts Title	Dr($)	Cr($)
Aug 3, 2016	Cash (104 x 1000 x 10% + 22 x 9000 x 10%)	$          30,200
	Subscription Receivable:
	Common Stock (22 x 9000 x 90%)	$        178,200
	Preferred Stock (104 x 1000 x 90%)	$          93,600
	Common Stock subscribed( 22 x 9000)		$        198,000
	Preferred stock Subscribed (100 x 1000)		$        100,000
	Additional paid in capital-Preferred Stock(4 x 1000)		$            4,000
	(Being share subscription recorded)
Nov 1, 2016	Cash (104 x 1000 x 90% + 22 x 9000 x 90%)	$        271,800
	Subscriptions Receivable: Common Stock		$        178,200
	Subscriptions Receivable: Preferred Stock		$          93,600
	(Being cash received for full settlement)
Nov 1, 2016	Common Stock subscribed	$        198,000
	Preferred stock Subscribed	$        100,000
	Common Stock		$        198,000
	Preferred Stock		$        100,000
	(Being shares issued on receipt of full payment)