Tran Corporation is authorized to issue both preferred and common stock. The par

Question

Tran Corporation is authorized to issue both preferred and common stock. The par value of the preferred is $48. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock. Feb. 1 Issued 19,500 shares for cash at $58 per share. July 1 Issued 15,000 shares for cash at $62 per share.

Journalize the transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Post to the stockholders’ equity accounts. (Post entries in the order of journal entries presented in the previous part.)

Explanation / Answer

Solution:

Feb. 1 Cash (19,500 X $58) .............................. 1,131,000

Preferred Stock (19,500 X $48)........................................................................... 936,000

Paid-in Capital in Excess of Par Value—Preferred Stock (19,500 X $10)...........195,000

July 1 Cash (15,000 X $62).............................. 930,000

Preferred Stock (15,000 X $48).......................................................................... 720,000

Paid-in Capital in Excess of Par Value—Preferred Stock (15,000 X $14)......... 210,000

Preferred stock

1-Feb

936,000

1-Jul

720,000

Paid-in-capital in excess of par value-preferred stock

1-Feb

195,000

1-Jul

210,000

Preferred stock

1-Feb

936,000

1-Jul

720,000

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