No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. IRWIN CORPORATION Ba

Question

No.

Account Titles and Explanation

Debit

Credit

1.

2.

3.

4.

IRWIN CORPORATION
Balance Sheet (Partial)
December 31, 2014

Irwin Corporation has been authorized to issue 20,200 shares of $100 par value, 10%, noncumulative preferred stock and 1,128,680 shares of no-par common stock. The corporation assigned a $2.80 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders’ equity.
Preferred Stock $116,000 Paid-in Capital in Excess of Par—Preferred Stock 24,300 Common Stock 1,128,680 Paid-in Capital in Excess of Stated Value—Common Stock 1,956,300 Treasury Stock (1,200 common shares) 16,800 Paid-in Capital from Treasury Stock 600 Retained Earnings 83,200
The preferred stock was issued for land having a fair value of $140,300. All common stock issued was for cash. In November, 1,800 shares of common stock were purchased for the treasury at a per share cost of $14. In December, 600 shares of treasury stock were sold for $15 per share. No dividends were declared in 2014.

Explanation / Answer

Journal Entries:

Debit Credit

1) Issuance of preferred stock for land. Land 140,300

Preferred Stock - At Par 116,000

Paid-in Capital in Excess of Par 24,300

—Preferred Stock

2) Issuance of common stock for cash. Cash 3,084,980

Common Stock 1,128,680

Paid-in Capital in Excess of Stated Value 1,956,300

—Common Stock

3) Purchase of common treasury stock for cash. Treasury Stock 25200

Cash 25200

4) Sale of treasury stock for cash. Cash 9000

Treasury Stock 8400

Paid-in Capital from Treasury Stock 600

The stockholders’ equity section at December 31, 2014 :

Amount $ Amount $ Common Stock 1128680 Paid-in Capital in Excess of Stated Value—Common Stock 1956900 3,085,580 Preferred Stock 116000 Paid-in Capital in Excess of Par—Preferred Stock 24300 140,300 Retained Earnings 83,200 Treasury Stock (1200 common stock) 16,800 Total Share holders Value 3,325,880

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