Exercise 15-6 Flounder Corporation is authorized to issue 50,000 shares of $5 pa

Question

Exercise 15-6 Flounder Corporation is authorized to issue 50,000 shares of $5 par value common stock. During 2017, Flounder took part in the following selected transactions. 1. Issued 4,600 shares of stock at $48 per share, less costs related to the issuance of the stock totaling $6,500. 2. Issued 1,000 shares of stock for land appraised at $50,000. The stock was actively traded on a national stock exchange at approximately $49 per share on the date of issuance. 3. Purchased 540 shares of treasury stock at $43 per share. The treasury shares purchased were issued in 2013 at $40 per share. (a) Prepare the journal entry to record item 1. (b) Prepare the journal entry to record item 2. (c) Prepare the journal entry to record item 3 using the cost method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Explanation / Answer

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Event Account Debit Credit 1 Cash (4600*48)-6500 214300 Common Stock 4600*5 23000 Paid in Capital-in excess of par-Common Stock 191300 2 Land 1000*49 49000 Common Stock 1000*5 5000 Paid in Capital-in excess of par-Common Stock 44000 3 Treasury Stock (540*43 Cost as cost method) 23220 Cash 23220

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