Exercise 15-6 Swifty Corporation is authorized to issue 53,000 shares of $5 par

Question

Exercise 15-6 Swifty Corporation is authorized to issue 53,000 shares of $5 par value common stock. During 2017, Swifty took part in the following selected transactions. 1. Issued 5,300 shares of stock at $48 per share, less costs related to the issuance of the stock totaling $4,900 2. Issued 1,100 shares of stock for land appraised at $53,000. The stock was actively traded on a national stock exchange at approximately $49 per share on the date of issuance. 3. Purchased 500 shares of treasury stock at $45 per share. The treasury shares purchased were issued in 2013 at $42 per share (a) Prepare the journal entry to record item 1 (b) Prepare the journal entry to record item 2. (c) Prepare the journal entry to record item 3 using the cost method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit

Explanation / Answer

S. No. Account Title & Explanation Debit Credit a Cash ( 5300 * $48) $254,400 Common Stock Par value ( 5300 Share* $5) $26,500 Additional Paid up capital Excess from Par Value $227,900 ( Being 5300 Common Stock Issued @ $48 Stock Issuance Expense $4,900 Cash $4,900 ( being Stock isuuance expense Paid) Additional Paid up capital Excess from Par Value $4,900 Stock Issuance Expense $4,900 ( Being Stock Issuance expense written off through Paid up capital b. Land $53,900 Common Stock Par value ( 1100 Share* $5) $5,500 Additional Paid up capital Excess from Par Value [ 1100*$44] $48,400 ( Being 1100 Common Stock Issued for land Appraised) C. Tresury stock $22,500 Cash $22,500 ( Being 500 Treasury Stock Purchased @ $45/Share)

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