On July 3 the Wallace Company enters into a subscription contract with various investors. Terms of the contract are as follows:

1. Number of shares: 10,000 shares of no-par, $6 stated-value common stock.

2. Price and payment schedule: Subscription price is $13 per share. A $3 per share down payment is required, with a $5 per share payment due on both August 3 and October 3. Shares are issued to each subscriber upon full payment.

3. Default provisions: Defaulted shares are to be sold on October 4 at the then-current market price. If the proceeds from this sale are less than the total subscription price of the defaulted shares, an amount necessary to bring the proceeds up to the total subscription price is to be withheld from defaulted subscribers. Any remaining payments received from defaulted subscribers are to be returned to them.

Required

Record the July 3, August 3, and the October 3 and 4 journal entries, assuming that a subscriber to 500 shares of stock defaulted after making the down payment. The 500 shares were sold on October 4 for $11 per share.