Garcia Corporation recently hired a new accountant with extensive experience in
ID: 2477069 • Letter: G
Question
Garcia Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, he made the following entries for the corporation's capital stock. On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions. (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
May 2
Dr Cash $112,650
Cr Common Stock $2,610(7,510 x $11)
Cr Paid-in Capital in Excess of Par Value--Common Stock $30,040
May 10
Dr Cash $824,880(14,730 X $56)
Cr Preferred Stock $250,410 (14,730 X $17)
Cr Paid-in Capital in Excess of Par Value—Preferred Stock $574,470(14,730 X $39)
May 15
Dr Treasury Stock $11,760(800 X $14)
Cr Cash $11,760
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