The charter of Evergreen Capital Corporation authorizes the issuance of 900 shar

Question

The charter of Evergreen Capital Corporation authorizes the issuance of 900 shares of preferred stock and 1250 shares of common stock. During a two-month period, Evergreen completed the following stock-issuance transactions:

Write the three general journal entries required to record these stock transactions.

March 23 Issued 230 shares of $4 par value common stock for cash f $15/share. April 12 Received inventory with a market value of $23000 and equipment with a market value of $20000 for 320 shares of $4 par value common stock. April 17 Issued 900 shares of 5%, $20 par value preferred stock for $20/share

Explanation / Answer

Journal Entries for Stock Issue:- All amounts in $s Account Tittles Debit Credit 23-Mar Cash A/c Dr 3450 (230*15) To Common Stock a/c 920 (230*4) To Additional Paid In Capital A/c 2530 (230*11) (Being 230 shares issued at $15 per share against $4 par value and $11 Additional paid in Capital) 12-Apr Inventory A/c Dr 23000 (Market Value) Equipment a/c Dr 20000 (Market Value) To Common Stock a/c 1280 (320*4) To Additional Paid In Capital A/c 41720 (Remining Value) (Being issue of common stock for consideration in Kind against $4 par value and remaining for paid in capital) 17-Apr Cash A/c Dr 18000 (900*20) To 5% Preferred Stock a/c 18000 (Being issue of 5% preferred stock against PAR value of $ 20)

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