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 allotment will include:

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