Bonata Inc. sells 1,400 common shares on subscription basis at $65 per share on June 1...

Bonata Inc. sells 1,400 common shares on subscription basis at $65 per share on June 1 and accepts 45% down payment. On December 1, Bonata collect the remaining 55% and issues the shares.

Prepare the company's journal entries.

Expert Solution

Solution:

	Journal Entries
	Date	Account Title and explanation	Debit	Credit

	June . 01	Cash (1400 Shares X $ 65 X 45%)	$ 40,950
		Shares Subscription and Allottment		$ 40,950
		(To record the advance money for shares subscription)


	December.01	Shares Subscription and allottment	$ 40,950
		Cash (1400 Shares X $ 65 X 55%)	$ 50,050
		Common Stock		$ 91,000
		(Record the issue of Common stock )

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