During 2016, Goodfellow has the following transactions involving its common and

Question

During 2016, Goodfellow has the following transactions involving its common and preferred stock:

a.

Issued 15,000 shares of $5 par common stock for $15 a share. This brings total shares outstanding to 50,000 shares and 100,000 shares are authorized.

b.

Issued 5,000 shares of $100 par, 6%, cumulative preferred stock for $121 per share.

Required:
Prepare a journal entry for each transaction.

a.

Issued 15,000 shares of $5 par common stock for $15 a share. This brings total shares outstanding to 50,000 shares and 100,000 shares are authorized.

b.

Issued 5,000 shares of $100 par, 6%, cumulative preferred stock for $121 per share.

Explanation / Answer

Notes:

1. Common Stock Bank = 15,000 Shares * $ 15

2. Common Stock = 15,000 Shares * $ 5

3. Paid in Capital In Excess of Par - Common Stock = 15,000 Shares * $ 10

4. Preferred Stock Bank = 5,000 Shares * $ 121

5. Preferred Stock = 5,000 Shares * $ 100

6. Paid in Capital In Excess of Par - Preferred Stock = 5,000 Shares * $ 21

Particulars Debit Credit a. Bank A/c Dr. $ 225,000 Common Stock $ 75,000 Paid in Capital In Excess of Par - Common Stock $ 150,000 b. Bank A/c Dr. $ 605,000 Preferred Stock $ 500,000   Paid in Capital In Excess of Par -Preferred Stock $ 105,000

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