3. During 2016, Good fellow has the following transactions involving its common

Question

3. During 2016, Good fellow has the following transactions involving its common and preferred stock a. Issued 15,000 shares of $5 par common stock for $15 a share. This brings total shares b. Issued 5,000 shares of $100 par, 6%, cumulative preferred stock for $121 per share c. When the market value of the common stock reached $15 a share, Goodfellow declareda outstanding to 50,000 shares and 100,000 shares are authorized. 3-for-1 stock split, reducing the par value to $1.67 per share. Required: Prepare a journal entry for each transaction.

Explanation / Answer

a Cash 225000 (15000*15)         Common stock 75000 (15000*5)          Paid in capital in excess of par -common stock 150000 (15000*10) b Cash 605000 (5000*121)         Preferred stock 500000 (5000*100)          Paid in capital in excess of par -preferred stock 105000 (5000*21) c No entry

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