Exercise 15-6 Cheyenne Corporation is authorized to issue 48,000 shares of $5 pa

Question

Exercise 15-6 Cheyenne Corporation is authorized to issue 48,000 shares of $5 par value common stock. During 2017, Cheyenne took part in the following selected transactions. 1. Issued 5,200 shares of stock at $47 per share, less costs related to the issuance of the stock totaling $7,400. 2. Issued 1,200 shares of stock for land appraised at $48,000. The stock was actively traded on a national stock exchange at approximately $48 per share on the date of issuance. 3. Purchased 460 shares of treasury stock at $43 per share. The treasury shares purchased were issued in 2013 at $40 per share. (a) (b) (c) Prepare the journal entry to record item 1. Prepare the journal entry to record item 2. Prepare the journal entry to record item 3 using the cost method. (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.) No. Account Titles and Explanation Debit Credit (a) Cash Common Stock Paid-in Capital in Excess of Par - Common Stock (b) Land Common Stock Paid-in Capital in Excess of Par - Common Stock c) Treasury Stock Cash

Explanation / Answer

Journal Entries Date Account Title and explanation Debit Credit a) Cash (5,200 Shares X 47 - $ 7,400) $               2,37,000          To common Stock (5,200 Shares X $ 5) $                     26,000          To Paid in capital in Excess of par - Common Stock $                 2,11,000 (To Record the issuance of common stock) b) Land $                  48,000         To Common Stock (1200 Shares X $ 5 per Shares) $                       6,000          To Paid in capital in Excess of par - Common Stock $                     42,000 (To Record the purchase of land against issuance of common stock) c) Treasury Stock (460 Shares X $ 43) $                  19,780          To Cash $                     19,780 (To Recordh the purchase of treasurry Stock)

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