BlueLtd. offered to sell common shares on a subscription basis. Each subscription allowed for the purchase of16shares at a price of $66per share. Terms of the subscription stated that subscribers were to pay25% of the price as a down payment, with the remainder due in six months. On June 1, 2020,170subscriptions were sold. Six months later, on December 1, only85of the subscriptions were fully paid for. According to the subscription contract, the company would retain the down payment on any defaulted subscriptions.

A. Prepare the journal entries to record the above transactions.

B. Prepare the December 1 journal entry, assuming instead thatBluerefunded the down payment on the defaulted subscriptions.