The above entries at once place the entire authorized capital stock on the books. When further subscriptions are made, subscription account is debited and unsubscribed stock is credited. When subscriptions are paid, cash is debited and subscriptions credited.

When subscriptions are payable in regular installments, payments may be credited to subscriptions. The plan is sometimes followed, however, of opening an account for each installment, as Installment No. 1, to which payments are credited. When the installment is fully paid this account would be closed into subscription account.

Or still another formula—when stock has been sold subject to assessments to be made by the board of directors, and an assessment has been called the entry is:

Assessment No. 1.$10,000
To subscriptions $10,000
An assessment of 20% as per resolution of the board of directors
John Doe5,000
Richard Roe3,000
Henry Snow2,000

When paid, cash is debited and assessment No. 1 is credited. When the next assessment is called an account is opened with assessment No. 2.

27. When a Part of the Stock is Paid for in Property and the Balance in Money. A corporation known as The National Manufacturing Company is formed to take over a manufacturing business owned by John Doe. The capital stock is $100,000 of which Mr. Doe is to receive $50,000 for the assets and goodwill of his business, the company agreeing to assume his liabilities. His statement of affairs shows the following:

Assets
Cash in bank$2,264.00
Accounts receivable4,650.50
Machinery9,000.00
Manufactured goods2,100.00
Material and supplies3,780.00
Furniture and fixtures700.00$22,494.50
————
Liabilities
Accounts payable864.20864.20
————————
21,630.30

Since the net assets are $21,630.30, and the stock to be issued to John Doe is $50,000 the difference, or $28,369.70, represents the amount paid for the goodwill of the business.

The transaction is entered as follows:—