Question $1.$

For accounting purposes, of the following characteristics, which distinguish a common share from a preferred share? Explain your answer briefly.

$$The share has no par value.

$$The share has voting rights.

$$The share has a residual claim.

$$The share does not have cumulative dividends.

$$The share is issued and outstanding.

Question $2.$

In January $2023,$ Rita Inc. sells $50,000$ no par value common shares for $$20$ each to the investing public on a subscription basis. Terms of the sale require the investors to pay $$11$ on contract signing, $$5$ in July $2023,$ and the balance in December $2023.$ The subscription contract provides that Rita Inc. is not required to reimburse investors who default on their contract.

In July $2023,$ investors that subscribed to purchase $40,000$ shares make the agreed$-$upon payment; the remainder default on the contract. In December $2023,$ investors that subscribed to purchase $35,000$ shares make the agreed$-$upon payment; the remainder default on the contract.

Required:

Prepare the journal entries required in January $2023,$ July $2023,$ and December $2023$ assuming that Rita Inc. follows ASPE pertaining to accounting for equity transactions.