QUESTION 9- ISSUANCE OF SHARES Looby & an unlimited number of common shares and

Question

QUESTION 9- ISSUANCE OF SHARES Looby & an unlimited number of common shares and 10,000 shares $4.00 cumulative preferred shares Prepare the jounal entries to record the following transactions that occurred during the first year of operations. Feb 19 Issued 45,000 common shares at S1.75 per share. Spencer Inc. received its approved articles of incorporation granting the right to issue Date Account Debit Credit Feb 22d Gave the corporation's promoters 30,000 common shares for their services in getting the corporation organized. The directors valued the services at S50,000 ate Account Debit |Credit Mar 30h Exchanged 100,000 common shares for machinery with a fair value market value of $200,000. At the time of the acquisition, the shares were being traded for $2.35 per share Date Account Debit Credit

Explanation / Answer

Bank A/C

To Share Capital A/C

(45000 x $1.75)

$78,750

-

-

$78,750

Preliminary Expenses A/C

Paid-in Capital in Excess of Par Value A/C

To Share Capilat A/C (30000x$1.75)

(30000 shares for $50000)

$50,000

$2,500

-

-

-

$52,500

Machinery A/C

Paid-in Capital in Excess of Par Value A/C

To Share Capital A/C

(100000 x $2.35)

$200,000

$35,000

-

-

-

$235,000

Date Account Debit Credit Feb 19

Bank A/C

To Share Capital A/C

(45000 x $1.75)

$78,750

-

-

$78,750

Feb 22

Preliminary Expenses A/C

Paid-in Capital in Excess of Par Value A/C

To Share Capilat A/C (30000x$1.75)

(30000 shares for $50000)

$50,000

$2,500

-

-

-

$52,500

Mar 30

Machinery A/C

Paid-in Capital in Excess of Par Value A/C

To Share Capital A/C

(100000 x $2.35)

$200,000

$35,000

-

-

-

$235,000

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.