Tunic Corporation was organized on April 1. With an authorization of 25.000 shar

Question

Tunic Corporation was organized on April 1. With an authorization of 25.000 shares of six percent. $50 par value preferred stock and 200.000 shares of $5 par value common stock. During April, the following transactions affecting stockholders' equity occurred: Apr. 1 Issued 80,000 shares of common stock at $20 cash per share. 3 Issued 2,000 shares of common stock to attorneys and promoters in exchange for their services in organizing the corporation. The services were valued at $31,000. 8 Issued 3,000 shares of common stock in exchange for equipment with a fair market value of $55,000. 20 Issued 6,000 shares of preferred stock for cash at $60 per share. Required a. Prepare journal entries to record the above transactions. b. Prepare the stockholders' equity section of the balance sheet at April 30. Assume that the net income for April is $51,000.

Explanation / Answer

A./

B./

DATE ACCOUNT TITLE DEBIT CREDIT APR 1 CASH $1600000 COMMON STOCK $400000 ADDITIONAL PAID IN CAPITAL $1200000 APR 3 LEGAI SERVICE EXPENSES $31000 COMMON STOCK $10000 ADDITIONAL PAID IN CAPITAL $21000 APR 8 EQUIPEMENT $55000 COMMON STOCK $15000 ADDITIONAL PAID IN CAPITAL $40000 APR 20 CASH $360000 PREFERED SHARE $300000 ADDITIONAL PAID IN CAPITAL $60000

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