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In January 2021, Rita Inc. sells 65,000 no par common shares for $28 each to the investing public on a subscription basis. Terms of the
In January 2021, Rita Inc. sells 65,000 no par common shares for $28 each to the investing public on a subscription basis. Terms of the sale require the investors to pay $12 on contract signing, $6 in July 2021, and the balance in December 2021. The subscription contract provides that Rita Inc. is not required to reimburse investors who default on their contract. In July 2021, investors that subscribed to purchase 44,000 shares make the agreed upon payment; the remainder default on the contract. In December 2021, investors that subscribed to purchase 37,000 shares make the agreed upon payment; the remainder default on the contract. Required Prepare the journal entries required in January 2021, July 2021, and December 2021 assuming that Rita Inc. follows ASPE pertaining to accounting for equity transactions. Record the journal entry at date of contract signing in January 2021. (Record debits first, then credits. Explanations are not required.) Date Accounts Debit Credit Jan. 31, 2021 Cash Common shares subscribed Contributed surplus Retained earnings Subscriptions receivable
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