11.2 Fagan Co. had these transactions during the current period. June 12 Issued

Question

11.2

Fagan Co. had these transactions during the current period. June 12 Issued 86,100 shares of $1 par value common stock for cash of $322,875. July 11 Issued 4,480 shares of $103 par value preferred stock for cash at $108 per share. Nov. 28 Purchased 1,990 shares of treasury stock for $7,110. Prepare the journal entries for the Fagan Co. transactions shown above. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Explanation / Answer

Journal Entries for the Fagan Co.

Note:

12th June

Cash = $322,875

Common Stock = 86,100 shares X $1 par value = $86,100

Additional Paid-In Capital = $322,875 - $86,100 = $236,775

11th July

Cash = 4,480 shares X $108 per share = $483,840

Preferred Stock = 4,480 shares X $103 par value = $461,440

Additional Paid-In Capital = $483,840 - $461,440 = $22,400

Date Account Titles and Explanation Debit Credit 12-Jun Cash 322,875 Common Stock 86,100 Additional Paid-In Capital 236,775 Issue of common stock 11-Jul Cash 483,840 Preferred Stock 461,440 Additional Paid-In Capital 22,400 Issue of Preferred stock 28-Nov Treasury Stock 7,110 Cash 7,110 Purchase of Treasury stock

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