Exercise 11-5 Monty Corp. recently hired a new accountant with extensive experie

Question

Exercise 11-5 Monty Corp. recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, he made the following entries for the corporation's capital stock. May 2 Cash 126,000 Capital Stock 126,000 (Issued 8,400 shares of $12 par value common stock at $15 per share) 10 Cash 780,000 Capital Stock 780,000 (Issued 15,000 shares of $19 par value preferred stock at $52 per share) 15 Capital Stock Cash 8,140 8,140 (Purchased 740 shares of common stock for the treasury at $11 per share) On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions. (Record journal entries in the order presented in the problem. 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 O for the amounts.) Date Account Titles and Explanation Credit

Explanation / Answer

May-02 Cash 126000       Common stock 100800 =8400*12       Paid in capital in excess of par-Common stock 25200 May-10 Cash 780000       Preferred stock 285000 =15000*19       Paid in capital in excess of par-Preferred stock 495000 May-15 Treasury stock 8140        Cash 8140

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