For Above Journal Entry Worksheet: 1.Record the issuance to four individuals of

Question

For Above Journal Entry Worksheet:

1.Record the issuance to four individuals of 4,200 shares each of common stock with no par value for a price of $32 per share.

2.Record the issuance to an outside investor of 5,200 shares of common stock with no par value for a price of $32 per share.

3.Record the issuance of 7,200 shares of preferred stock with a par value $10 for a price of $17 per share.

E11-6 Recording and Reporting Stockholders Equity Transactions [LO 11-2, LO 11-4] Ava School of Learning obtained a charter at the start of the year that authorized 50,000 shares of no-par common stock and 20,000 shares of preferred stock, par value $10. During the year, the following selected transactions occurred a. Collected S32 cash per share from four individuals and issued 4,200 shares of common stock to each b. Issued 5,200 shares of common stock to an outside investor at $32 cash per share C. Issued 7,200 shares of preferred stock at $17 cash per share Required 1. Prepare the journal entries indicated 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 Record the issuance to four individuals of 4,200 shares each of common stock with no par value for a price of $32 per share Note: Enter debits before credits. ransaction General Journal Debit Credit Record entry Clear entry View general journal

Explanation / Answer

1 Transaction General Journal Debit Credit a. Cash (4 x 4200 x $32) 537600 Common stock 537600 (To record issuance of no-par common stock) b. Cash (5200 x $32) 166400 Common stock 166400 (To record issuance of no-par common stock) c. Cash (7200 x $17) 122400 Preferred stock (7200 x $10) 72000 Additional paid-in capital-Preferred stock 50400 (To record issuance of preferred stock) 2 AVA SCHOOL Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital: Preferred stock, $10 par value, 20,000 shares authorized, 7,200 shares issued and outstanding 72000 Common stock, no-par, 50,000 shares authorized, 22,000 shares issued and outstanding 704000 Additional paid-in capital-Preferred stock 50400 Total Contributed Capital 826400 Retained Earnings 28000 Total Stockholders' Equity $ 854400

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