III. Prepare journal entries using the memorandum method.
On July 1, 2016 Classic Corporation was authorized to issue 100,000 ordinary shares P100 par and 45,000 10% preference shares P150 par. The following are the stock transactions:
July 1 Subscriptions made for ordinary shares at par for 40,000 shares. The subscribers paid one half of the subscription price, balance to be paid in two equal installments.
July 5 Subscriptions made for 20,000 preference shares at subscription price P200. The subscribers paid one half of the subscription price, balance to be paid at the end of the month.
July 10 Issued 15,000 ordinary shares to five investors at P120.
July 12 Issued 5,000 preference shares in exchange for land costing P700,000 and with fair value of P800,000.
July 31 Preference subscribers paid in full.
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