Exhibit 16-2 Lowball, 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.
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Refer to Exhibit 16-2.The initial entry to record this subscription and the down payment would include a
A)credit to Common Stock Subscribed for $10, 000
B)credit to Additional Paid-in Capital from Subscribed Stock for $10, 000
C)debit to Subscriptions Receivable: Common Stock for $30, 000
D)debit to Cash for $2, 000

Question

Quizplus · Accepted Answer

The initial entry would include a credit to Common Stock Subscribed for the total par value of the subscribed shares, which is 2,000 shares at $5 par value each, totaling $10,000.