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Journalize the Transactions for the Stock Subscription Plan for Poplar

question 54

Essay

Journalize the transactions for the stock subscription plan for Poplar Company. On April 1, Poplar received subscriptions for 250 shares of $20 par value common stock at $26 per share. The buyer will pay two equal installments on May 1 and July 1. Assume all payments are made as scheduled and the company issues the stock after the July 1 collection.


Definitions:

Equity Method

An accounting technique used by a company to record its investment in another company, where the investment represents a significant influence over the investee.

Consolidated Net Income

The total net income of a parent company and its subsidiaries after elimination of inter-company transactions and accounts.

Net Income

The amount of earnings left over after all expenses and taxes have been subtracted from total revenue.

Dividends

Payments made by a corporation to its shareholders, out of its profit or reserves, usually on a regular basis.

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