On August 5, Synthetic Carpet Inc., a carpet wholesaler, issued for cash 500,000
ID: 2446121 • Letter: O
Question
On August 5, Synthetic Carpet Inc., a carpet wholesaler, issued for cash 500,000 shares of no-par common stock (with a stated value of $1) at $3, and on December 17, it issued for cash 5,000 shares of preferred stock, $180 par at $200
Journalize the entries for August 5 and December 17, assuming that the common stock is to be credited with the stated value.
For a compound transaction, if an amount box does not require an entry, leave it blank
What is the total amount invested (total paid-in capital) by all stockholders as of December 17?
Explanation / Answer
Date
Title of Account
Debit
Credit
Aug. 5
Cash
1500000
Common Stock
500000
Additional paid-in capital
1000000
Dec. 17
Cash
1000000
Preferred Stock
900000
Paid-in Capital in Excess of Par - Preferred Stock
100000
The total amount invested (total paid-in capital) by all stockholders as of December 17 is ($5,00,000 + $9,00,000) = $14,00,000.
Date
Title of Account
Debit
Credit
Aug. 5
Cash
1500000
Common Stock
500000
Additional paid-in capital
1000000
Dec. 17
Cash
1000000
Preferred Stock
900000
Paid-in Capital in Excess of Par - Preferred Stock
100000
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