Franco Corporation was organized on January 1, 2012. It is authorized to issue 1

Question

Franco Corporation was organized on January 1, 2012. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year.
Jan. 10 Issued 80,000 shares of common stock for cash at $4 per share.
Mar. 1 Issued 5,000 shares of preferred stock for cash at $105 per share.
Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000.The fair market value of the land was $85,000.
May 1 Issued 80,000 shares of common stock for cash at $4.50 per share.
Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $30,000 for services provided in helping the company organize.
Sept. 1 Issued 10,000 shares of common stock for cash at $5 per share.
Nov. 1 Issued 1,000 shares of preferred stock for cash at $109 per share.

Explanation / Answer

Jan 10 - 80,000 shs @ $4 DR Cash 320,000 CR Common stock 160,000 CR Paid In Capital, Common 160,000 March 1 - 5,000 shs Preferred @ $105 DR Cash 525,000 CR Preferred stock 500,000 CR PIC, Preferred 25,000 April 1 - 24,000 shs for Land valued at $85,000 DR Land 85,000 CR Common 48,000 CR PIC, Common 37,000 May 1 - 80,000 shs @ 4.50 DR Cash 360,000 CR Common 160,000 CR PIC, Common 200,000 Aug 1 - 10,000 shs for Legal services DR Organization expense 30,000 CR Common 20,000 CR PIC, Common 10,000 Sept 1 - 10,000 shs @ $5.00 DR Cash 50,000 CR Common 20,000 CR PIC, Common 30,000 Nov 1 - 1,000 shs Prfd @ $109 DR Cash 109,000 CR Preferred 100,000 CR PIC, Preferred 9,000

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