Ava School of Learning obtained a charter at the start of 2013 that authorized 5
ID: 2502566 • Letter: A
Question
Ava School of Learning obtained a charter at the start of 2013 that authorized 50,000 shares of no-par common stock and 20,000 shares of preferred stock, par value $10. During 2013, the following selected transactions occurred
Prepare the journal entries indicated for each of these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Prepare the stockholders
a. Collected $31 cash per share from four individuals and issued 4,100 shares of common stock to each. b. Issued 5,100 shares of common stock to an outside investor at $31 cash per share. c. Issued 7,100 shares of preferred stock at $16 cash per share.1.
Prepare the journal entries indicated for each of these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Explanation / Answer
a)dr Cash (+A) (4,100 x $31 x 4) 508,400
cr Common Stock (+SE) 508,400
b)Cash (+A) (5,100 shares x $31) 158,100
Common Stock (+SE) 158,100
c)Cash (+A) (7,100 shares x $16) 113,600
Preferred Stock (+SE) (7,100 shares x $10) 71,000
Additional Paid-in Capital, Preferred (+SE) 71,000
2.
Contributed Capital:
Preferred Stock, par $10, authorized 20,000
shares, issued and outstanding, 8,000 shares
$ 71,000
Additional Paid-in Capital, Preferred 71,000
Common Stock, no-par, authorized 50,000
shares,issued and outstanding, 26,000 shares
666,500
Total Contributed Capital 808,500
Retained Earnings 27,000
Total Stockholders Equity $ 811,200
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