Sales Corporation\'s charter authorized issuance of 106,400 shares of $10 par va

Question

Sales Corporation's charter authorized issuance of 106,400 shares of $10 par value common stock and 56,300 shares of $50 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent of the others. Issued a SI 1,200, 9% bond payable at par and gave as a bonus one share of preferred stock, which at that time was selling for S106 a share. Issued 590 shares of common stock for equipment. The equipment had been appraised at $7,560; the seller's book value was $6,280. The most recent market price of the common stock is $16 a share. Issued 430 shares of common and 95 shares of preferred for a lump sum amounting to S10,840. The common had been selling at $14 and the preferred at S68. Issued 180 shares of common and 51 shares of preferred for equipment. The common had a fair value of $16 per share; the equipment has a fair value of $6,650. Record the transactions listed above in journal entry form. (Round answers to 0 decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Explanation / Answer

No Account Title Dr Cr 1 Cash $11,200 9% Bonds payable $11,200 Bonus to Bondholders 23744 Preferred stock 11200/50=224 stock*50 11200 Paid in capital in excess-preferred stock 224*56 12544 2 Equipment 7560 Common stock 590*10 5900 Paid in capital in excess of par-Common stock 1660 3 Cash 10840 Common stock 430*10 4300 Preferred stock 95*50 4750 Paid in capital in excess of par 1790 4 Equipment 6650 Common stock 180*10 1800 Preferred stock 51*50 2550 Paid in capital in excess of par-Common Stock 2300

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