Callaghan Inc decided to sell shares to raise additional capital so that it could expand into the rapidly growing service industry The corporation chose to sell these shares through a subscription basis and publicly notified the investment world The offering was 40,000 shares at $22 a share The ter...

a Original Subscription Subscriptions Receivable 880000 40000 shares X 22 each Common Shares Subscri ...

Callaghan Inc. decided to sell shares to raise additional capital so that it could expand into the

Question:

Callaghan Inc. decided to sell shares to raise additional capital so that it could expand into the rapidly growing service industry. The chose to sell these shares through a subscription basis and publicly notified the investment world. The offering was 40,000 shares at $22 a share. The terms of the subscription were 35% down and the balance at the end of six months. All shares were subscribed for during the offering period.
Instructions
(a). Prepare the journal entries for the original subscription, the collection of the down payments, the collection of the balance of the subscription price, and the issuance of the shares.
(b). Discuss how the Subscriptions Receivable account should be presented on the if it is still outstanding at the end of the reporting period.
(c). Discuss how Callaghan should account for the balance in the subscription account and the amounts already collected if the subscriber defaults before making the final payment. Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...