Novak Corp. is authorized to issue both preferred and common stock. The par valu
ID: 2590536 • Letter: N
Question
Novak Corp. is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock. Feb. Issued 73,400 shares for cash at $95 per share. July 1 Issued 111,300 shares for cash at $103 per share Journalize the 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 0 for the amounts.) Date Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Post to the stockholders' equity accounts. (Use T-accounts.) (Post entries in the order of journal entries posted in the previous part.) Preferred Stock Pald-in Capital in Excess of Par StockExplanation / Answer
Feb 1:
Par value of 73400 shares = 73400*50 = 3670000
Paid-in-capital in excesss of par value = (95-50)*73400 = 40*73400 = 2936000
Journal Entry:
Cash Dr 6606000 (3760000+2936000)
Preferred Stock Cr 3760000
Paid-in-capital in excesss of par value Cr 2936000
July 1:
Par value of 111300 shares = 111300*50 = 5565000
Paid-in-capital in excesss of par value = (103-50)*111300 = 53*111300 = 5898900
Journal Entry:
Cash Dr 11463900 (5565000+5898900)
Preferred Stock Cr 5565000
Paid-in-capital in excesss of par value Cr 5898900
Stockholders' Equity Account
Preferred Stock
Date
Particulars
Amount
Date
Particulars
Amount
To Balance c/d
9325000
Feb-01
Cash
3760000
Jul-01
Cash
5565000
9325000
9325000
Paid-in-capital in excess of par value- preferred stock
To Balance c/d
8834900
Feb-01
Cash
2936000
Jul-01
Cash
5898900
8834900
8834900
Preferred Stock
Date
Particulars
Amount
Date
Particulars
Amount
To Balance c/d
9325000
Feb-01
Cash
3760000
Jul-01
Cash
5565000
9325000
9325000
Paid-in-capital in excess of par value- preferred stock
To Balance c/d
8834900
Feb-01
Cash
2936000
Jul-01
Cash
5898900
8834900
8834900
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