Lindsey Hunter Corporation is authorized to issue 51,600 shares of $3 par value

Question

Lindsey Hunter Corporation is authorized to issue 51,600 shares of $3 par value common stock. During 2014, Lindsey Hunter took part in the following selected transactions. Issued 5,450 shares of stock at $51 per share, less costs related to the issuance of the stock totaling $7,720. Issued 1,300 shares of stock for land appraised at $51,600. The stock was actively traded on a national stock exchange at approximately $52 per share on the date of issuance. Purchased 590 shares of treasury stock at $42 per share. The treasury shares purchased were issued in 2010 at $38 per share. Prepare the journal entry to record item 1. Prepare the journal entry to record item 2. 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

Date Account Titles & Explanations Debit Credit 1 Cash 270230 Common Stock-$3 par value 16350 Paid in capital in excess of par 253880 (issue of 5450 shares at $51, less cost of issue $7720) 2 Land 67600 Common Stock-$3 par value 3900 Paid in capital in excess of par 63700 (issue of 1300 shares for purchase of land) Note: Market value is a more objective measure of value of the land than the appraised value) 3 Treasury stock 24780 Cash 24780 (purchase of 590 shares of treasury stock @ $42)

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