The charter of Evergreen Capital Corporation authorizes the issuance of 900 shar

Question

The charter of Evergreen Capital Corporation authorizes the issuance of 900 shares of preferred stock and 1250 shares of common stock. During a two-month period, Evergreen completed the following stock-issuance transactions:

Write the three general journal entries required to record these stock transactions.

March 23 Issued 230 shares of $4 par value common stock for cash f $15/share. April 12 Received inventory with a market value of $23000 and equipment with a market value of $20000 for 320 shares of $4 par value common stock. April 17 Issued 900 shares of 5%, $20 par value preferred stock for $20/share

Explanation / Answer

Journal entries:

To Preferred Stock

(900 *20)

Date Description Debit Credit March 23 Cash(230*15) $3,450 To Common stock(230*4) $920 To Paid in excess of par(230*11) $2530 April 12 Inventory $23,000 Equipment $20,000 To Common stock (320*4) $1,280 To Paid in excess of par $41,720 April 17 Cash $18,000

To Preferred Stock

(900 *20)

$18,000

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