Details of the Problem. On January 1, 2021, Bahaghari Corporation received authorization to issue 50,000 ordinary shares at a par value of P100 per share. The shares were offered at a subscription price of P125. Subsequently, a subscription for a total of 10,000 shares was received from investors requiring a 25% down payment with the balance payable in two installments within six months. The subscribers paid the first installment on March 31. Subsequently, on June 30 all paid in full except for Abel, a subscriber for 500 shares, who defaulted. The company spent P1,375 for advertising and legal expenses for the delinquency sale on July 15. Three bidders responded to the announcement: A with a bid for 400 shares, B for 350 shares, and C for 300 shares. The highest bidder paid on July 20 and stock certificates were issued. Directions: Prepare the journal entries for the above transactions.
