Wonder Sales is authorized to issue 100,000 shares of $100 par, 2% preferred sto

Question

Wonder Sales is authorized to issue 100,000 shares of $100 par, 2% preferred stock and 1,000,000 shares of $10 par common stock. (a) On January 2nd, Wonder Sales issues 5,000 shares of preferred stock for $107 per share and 65,000 shares of common stock at $10 per share. Journalize this issuance. (b) On January 25th, Wonder Sales issued 250 shares of preferred stock to a Morton Law Firm for settlement of an invoice for incorporation services. The invoice was for $36,000.00. Journalize this issuance. (c) On January 31st, Wonder Sales issues 500 shares of common stock to Setup Inc. for fixtures. The fixtures have a fair market value of $6,500.00. Journalize this issuance.

Explanation / Answer

(a) Jan 2nd Cash 1,185,000 Preferred Stock 500,000
Paid-in Capital in Excess of Par - P/S 35,000 Common Stock 650,000

(b) Jan 25th Organizational Expense Preferred Stock Paid-in Capital in Excess of Par - P/S Fixtures Common

Stock Paid-in Capital in Excess of Par - C/S 36,000- 25,000- 11,000 +6,500- 5,000 =1,500

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