Tarrant Corporation was organized in 2014 to operate a financial consulting busi
ID: 2472610 • Letter: T
Question
Tarrant Corporation was organized in 2014 to operate a financial consulting business. The charter authorized the following capital stock: common stock, par value $18 per share, 12,900 shares. During the first year, the following selected transactions were completed: a. Sold and issued 6,600 shares of common stock for cash at $36 per share. b. Sold and issued 1,200 shares of common stock for cash at $41 per share. c. At year-end, the accounts reflected income of $6,700. 9.value: 0.50 pointsRequired information Required: 1. Prepare the journal entries required for the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) HintsReferenceseBook & Resources Hint #1 Check my work 10.value: 1.00 pointsRequired information 2. Prepare the stockholders’ equity section as it should be reported on the year-end balance sheet.
Explanation / Answer
Tarrant Corporation JOURNAL Date Account Tiltles and Explanation Debit ($) Credit ($) a Bank a/c ………………………….Dr 2,37,600 To Share capital a/c (6,600*$18) 1,18,800 To Security premium a/c (6,600*$18) 1,18,800 (Sales of 6,600 shares @ $36 per share) b Bank a/c ………………………….Dr 49,200 To Share capital a/c (1,200*$18) 21,600 To Security premium a/c (6,600*$23) 27,600 (Sales of 1,200 shares @ $41 per share) c No Entry required Statement Stockholders equity $ Authorized share capital 12,900 shares of $18 per shares 2,32,200 Issued, Subscribed & Paid up share capital 6,600 shares of $18 per shares 1,18,800 1,200 shares of $18 per shares 21,600 Total Paid up share capital 1,40,400 Security Premium $ 6,600 shares of $18 per shares 1,18,800 1,200 shares of $23 per shares 27,600 Total 1,46,400
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