B-Mobile Wireless needed additional capital to expand, so the business incorpora

Question

B-Mobile Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes B-Mobile to issue 70,000 shares of 5%, $100-par value cumulative preferred stock, and 110,000 shares of $2 par value common stock. During the first month, B-Mobile completed the following transactions:

Oct 2: Issued 19,000 shares of common stock for building with the market value of $250,000

6: Issued 800 shares of preferred stock for$110 per share

9: Issued 15,000 shares of common stock for cash of $90,000

10: Declared a $16,000 cash dividend for stockholders

25: Paid a the cash dividend

Questions:

1. Record the transaction in the general journal?

2. Prepare the stockholder’s equity section of B-Mobile’s balance sheet at Oct 31, 2014? Assume B-Mobile’s net income for the month was $92,000,

Explanation / Answer

Solution 1:

Solution 2:

Journal Entries - B-Mobile Wireless Date Particulars Debit Credit 2-Oct Building Dr $250,000.00         To Common Stock $38,000.00         To Paid in capital in excess of par - common stock $212,000.00 (To record purchase of building on issue of shares) 6-Oct Cash Dr $88,000.00         To Preferred Stock $80,000.00         To Paid in capital in excess of par - Preferred stock $8,000.00 (To record issue of preferred stock) 9-Oct Cash Dr $90,000.00         To Common Stock $30,000.00         To Paid in capital in excess of par - common stock $60,000.00 (To record issue of common stock) 10-Oct Retained Earnings Dr $16,000.00         To Dividend Payable $16,000.00 (To record declaration of dividends) 25-Oct Dividend Payable Dr $16,000.00         To Cash $16,000.00 (To record payment of dividend)

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