During its first year of operations, Criswell Inc. completed the following trans

Question

During its first year of operations, Criswell Inc. completed the following transactions relating to shareholders' equity. January 5: Issued 360,000 of its common shares for $8 per share and 2,600 preferred shares at $110. February 12: Issued 46,000 shares of common stock in exchange for equipment with a known cash price of $302,000. The articles of incorporation authorize 5,000,000 shares with a par value of $1 per share of common and 1,000,000 preferred shares with a par value of $100 per share.

Required: Record the above transactions in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

Answer:

1) January 5:

Issuance of common stock:

Cash (360000*$8) Dr. 2880000

To common stock (360000*$1)........................... 360000

To paid in capital- excess of par, common........... 2520000

Issuance of preferred stock:

Cash (2600*$110) Dr. 286000

To preferred stock (2600*$100)...........................260000

To paid in capital- in excess of par, preferred........26000

2) February 12:

Equipment Dr.302000

To common stock (46000*$1)...............................46000

To paid in capital- in excess of par, common.........256000

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