Incentive Corporation was authonzed to issue 12.000 shares of common stock, each

Question

Incentive Corporation was authonzed to issue 12.000 shares of common stock, each with a $1 par value Ouring its first year, the following selected transactions were completed a. issued 5,300 shares of common stock for cash at $23 per share b. Issued 1,300 shares of common stock for cash at $26 per share value: 1.00 points 2. Prepare the journal entry required for each of these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 2 Record the issuance of 5,300 shares of common stock with a par value $1 for a price of $23 per share. Note: Enter debits before credits. Transaction General Journal Debit Credit

Explanation / Answer

Solution: Transaction General Journal Debit Credit a. Cash 121,900 Common stock 5,300 Additional paid-in capital 116,600 Working Notes: Cash 121,900 [5,300 x $23 = $121,900] Common stock 5,300 [ 5,300 x $1= $5,300] Additional paid-in capital 116,600 [ 5,300 x($23- $1)= $116,600] b. Cash 33,800 Common stock 1,300 Additional paid-in capital 32,500 Working Notes: Cash 33,800 [1,300 x $26 = $33,800] Common stock 1,300 [ 1,300 x $1= $1,300] Additional paid-in capital 32,500 [ 1,300 x($26- $1)= $32,500] 3. INCENTIVE CORPORATION Balance Sheet (Partial) At December 31, Stockholders’ equity: Contributed capital: Common stock 6,600 Additional paid-in capital, common stock 149,100 Total contributed capital 155,700 Retained earnings 300 Stockholders’ equity 156,000 Please feel free to ask if anything about above solution in comment section of the question.

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