When companies offer new equity security issues, they publicize the offerings in

Question

When companies offer new equity security issues, they publicize the offerings in the financial press and on Internet sites. Assume the following were among the equity offerings reported in December 2013:

American Materials Transfer Corporation (AMTC)—7.5 million common shares, $0.001 par, priced at $13.736 each through underwriters led by Second Tennessee Bank N.A. and Morgan, Dunavant & Co., according to a syndicate official.

Proactive Solutions Inc. (PSI)—Offering of 9 million common shares, $0.01 par, was priced at $14.4 a share via lead manager Stanley Brothers, Inc., according to a syndicate official.

Prepare the appropriate journal entries to record the sale of both issues to underwriters. Ignore share issue costs. (If no entry is required for a particular event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

When companies offer new equity security issues, they publicize the offerings in the financial press and on Internet sites. Assume the following were among the equity offerings reported in December 2013:

Explanation / Answer

Assuming sale to underwrite happened and cash not received Journal Entry for AMTC Account Title Dr $ Cr $ Underwriter A/C              103,020,000.00 Common Share                                  7,500 Additional Paid in Capital in Excess of Par                   103,012,500 ( sale of 7.5 mio commom share $0.001 pat @$13.736 to underwriters) Journal Entry for PSI Account Title Dr $ Cr $ Underwriter A/C              129,600,000.00 Common Share                         90,000.00 Additional Paid in Capital in Excess of Par             129,510,000.00 ( sale of 9 mio commom share $0.01 pat @$14.4 to underwriters)

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.