Peterson Company Is Issuing 4 000 Ordinary Shares, Payable by Instalments

Multiple Choice

Peterson Company is issuing 4 000 ordinary shares, payable by instalments. Investors must pay $10 per share on application, $5 per share on allotment, and there will be a final call of $2 payable at a later date to be determined by directors. The journal entry to record the application will be:

A) debit Trust bank account, credit Application.
B) debit Cash, credit Ordinary share capital.
C) debit Cash, credit Allotment.
D) debit Application, credit Trust bank account..