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) 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

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

-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) 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

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.