A corporation received its charter and began business this year. The company is

ID: 2376099 • Letter: A

Question

authorized to issue 50,000 shares of $100 par, 10%, noncumulative, nonparticipating

preferred stock, and 500,000 shares of no-par common stock. The following selected

transactions occurred during this year:

Apr 5 Issued 250 shares of preferred stook for $104 cash per shares

June 15 Exchanged 750 shares of common stock for $15,000 in legal services incurred in the organization of the company.

Prepare journal entries to record these transactions.

Hi,

Please find the answer as follows:

April 5

Cash Dr. (250*104) 26000

Preferred Stock Cr. (250*100) 25000

Paid in Capital in Excess of Par (Preferred) Cr. 1000

June 15

Legal Services/Organization Expense Dr. 15000

Common Stock Cr. 15000

Thanks.

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