SHOW CALCULATIONS, AND FORMULAS for problem OR NO CREDIT GIVEN 2. United Rentals

Question

SHOW CALCULATIONS, AND FORMULAS for problem OR NO CREDIT GIVEN

2. United Rentals Corporation is authorized to issue 25, 000 shares of 6%, $100 par value preferred stock and 800,000 shares of $2 par value common stock. During 2015, its first year of operation, the company has the following stock transactions. Jan. 1 Issued 200,000 shares of common stock for cash at $5 per share. Jan. 15 Issued 6,000 shares of preferred stock for cash at $108 per share. Mar. 2 Attorneys for the company accepted 7,000 shares of common stock as payment for legal services rendered in helping the company incorporate. The legal services are estimated to have a value of $42,000 Apr. 30 Issued 50,000 shares of stock for land. The land had an asking price of $400,000. The stock is currently selling on a national exchange at $8 per share Sept. 5 Purchased 9,000 shares of common treasury stock at $12 per share. Dec. 6 Sold 4,000 shares of the treasury stock at $13 per share. Dec. 10 Sold the remaining treasury stock for $11 per share. Dec. 31 Determined that net income for the year was $650,000. INSTRUCTIONS Journalize the transactions for Untied Rentals Corporation

Explanation / Answer

Journal Entries Date Account Title and explanation Debit Credit Jan, 01 Cash (200,000 shares X $ 5 Per sahres) $            10,00,000        To Share Capital - Common Shares $                 4,00,000         To Excess of par value - Common Shares $                 6,00,000 (To Record the issue of shares capital) Jan, 15 Cash (6,000 shares X $ 108 Per sahres) $               6,48,000        To Share Capital - Preferred Capital $                 6,00,000         To Premium on preferred Shares capital $                     48,000 (To Record the issue of preferred shares capital) Mar , 02 Legal Fees $                  42,000        To Share Capital - Common Shares(7000 Shares X $ 2 per shares) $                     14,000         To Excess of par value - Common Shares $                     28,000 (To Record the issue of sahres against legal fees) Apr, 30 Land $               4,00,000        To Share Capital - Common Shares(50,000 Shares X $ 2 per shares) $                 1,00,000         To Excess of par value - Common Shares $                 3,00,000 (To Record the issue of sahres against land purchashed) Treasurry Stock $               1,08,000 Sept 05          To Cash $                 1,08,000 (To Record the purchase of treasurry Stock) Dec, 06 Cash (4000 Shares X $ 13) $                  52,000          To Treasurry Stock (4000 Shares X $ 12) $                     48,000            To Addittional pais in Capital - Treasurry Stock $                       4,000 (To record the sale of treasurry stock) Dec, 10 Cash (5000 Shares X $ 11) $                  55,000 Addittional pais in Capital - Treasurry Stock (5000 X $ 1) $                     5,000          To Treasurry Stock (5000 Shares X $ 12) $                     60,000 (To record the sale of treasurry stock) Dec, 31 No entry for determine the net income of $ 650,000 $                            -   $                              -

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