Page Ltd. was incorporated as a private company on January 2, 2018, and is autho

Question

Page Ltd. was incorporated as a private company on January 2, 2018, and is authorized to issue an unlimited number of common shares and $1 preferred shares. The company had the following share transactions in its first month of operations:

Jan. 6 Issued 197,000 common shares for $1.50 per share. 12 Issued 50,000 common shares for $1.81 per share. 17 Issued 10,200 preferred shares for $26.00 per share. 18 Issued 453,000 common shares for $2.00 per share. 24 Reacquired 190,000 common shares at $1.90 per share.

Explanation / Answer

Journal entry :

Date account and explanation debit credit Jan 6 Cash (197000*1.5) 295500 Common Stock 295500 (To record issue common stock) Jan 12 Cash (50000*1.81) 90500 Common Stock 90500 (To record issue common stock) Jan 17 Cash (10200*26) 265200 Preferred Stock 10200 Paid in capital in excess of par value 255000 (To record issue preferred stock) Jan 18 Cash (453000*2) 906000 Common Stock 906000 (To record issue common stock) Jan 24 Treasury stock (190000*1.9) 361000 Cash 361000 (To record treasury stock)

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