Transactions Affecting Stockholders\' Equity (AP11-2) Corporation began operatio

Question

Transactions Affecting Stockholders' Equity (AP11-2) Corporation began operations in January of the current year. The charter authorizesd P11-3 ollowing stock stock: 10 percent, $10 par value, 40.000 shares authorized Preti Common stock: $5 par value, 85.000 shares authorized ing the current year, the following transactions occurred in the order given: Issued 66,000 shares of common stock for $9 cash per share. Sold 9.000 shares of the preferred stock at $20 cash per share. Sold 1.000 shares of the preferred stock at $20 cash per share and 2,500 shares of common stock at s10 cash per share. Required Prov ide the journal entries required to record each of the transactions in (a) through (c)

Explanation / Answer

Sl.No Particulars Debit Credit a Cash (66000*9) 594000 Common Stock (66000*5 par value) 330000 Paid-In capital in excess of par value- Common (594000-330000) 264000 b Cash (9000*20) 180000 Preferred Stock (9000*10 par value) 90000 Paid-In Capital in excess of par value - Preferred 90000 c Cash (1000*20, 2500*10) 45000 Common Stock (2500*5) 12500 Paid-In capital In excess of par value - common 12500 Preferred stock (1000*10) 10000 Paid-In capital In excess of par value - preferred 10000

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