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 terms of the subscription were 35% down and the balance was due 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 Share Subscriptions Receivable account should be presented on the SFP if it is still outstanding at the end of the reporting period under ASPE and IFRS. 

c. Discuss how Callaghan should account for the balance in the subscription account and the amounts already collected if a subscriber defaults before making the final payment.