During its first year of operations, Pharoah Corporation had the following trans

Question

During its first year of operations, Pharoah Corporation had the following transactions pertaining to its common stock.

(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

Jan. 10 Issued 80,500 shares for cash at $6 per share. Mar. 1 Issued 5,000 shares to attorneys in payment of a bill for $37,700 for services rendered in helping the company to incorporate. July 1 Issued 33,300 shares for cash at $8 per share. Sept. 1 Issued 62,100 shares for cash at $10 per share.

Explanation / Answer

Solution a:

Solution b:

Journal Entries - Pharoah Corporation Date Particulars Debit Credit 10-Jan Cash Dr (80500*$6) $483,000.00       To Common Stock (80500*$5) $402,500.00       To Paid in capital in excess of par - common stock (80500*$1) $80,500.00 (To record issue of shares) 1-Mar Organization Expense Dr $37,700.00       To Common Stock (5000*$5) $25,000.00       To Paid in capital in excess of par - common stock $12,700.00 (To record share issued for service rendered by attorneys) 1-Jul Cash Dr (33300*$8) $266,400.00       To Common Stock (33300*$5) $166,500.00       To Paid in capital in excess of par - common stock (33300*$3) $99,900.00 (To record issue of shares) 1-Sep Cash Dr (62100*$10) $621,000.00       To Common Stock (62100*$5) $310,500.00       To Paid in capital in excess of par - common stock (62100*$5) $310,500.00 (To record issue of shares)

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