On February 10, Peerless Rocks Inc., a marble contractor, issued for cash 40,000

Question

On February 10, Peerless Rocks Inc., a marble contractor, issued for cash 40,000 shares of $10 par common stock at $34, and on May 9, it issued for cash 100,000 shares of $5 par preferred stock at $7.

If an amount box does not require an entry, leave it blank.

a1. Journalize the entry for February 10.

Account Debit Credit
Cash
Common Stock
Paid-In Capital in Excess of Par Common Stock

a2. Journalize the entry for May 9.


Account Debit Credit
Cash
Preferred Stock
Paid-In Capital in Excess of Par-Preferred Stock

b. What is the total amount invested (total paid-in capital) by all stockholders as of May 9?

Explanation / Answer

On February 10, Peerless Rocks Inc., a marble contractor, issued for cash 40,000 shares of $10 par common stock at $34, and on May 9, it issued for cash 100,000 shares of $5 par preferred stock at $7. a1. Journalize the entry for February 10. Account Debit Credit Cash $1,360,000 Common Stock $400,000 Paid-In Capital in Excess of Par Common Stock $960,000 a2. Journalize the entry for May 9. Account Debit Credit Cash $700,000 Preferred Stock $500,000 Paid-In Capital in Excess of Par-Preferred Stock $200,000 b. What is the total amount invested (total paid-in capital) by all stockholders as of May 9? $2,060,000

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