Answers Needed For A) B) & C) Wonder Sales is authorized to issue 100,000 shares

ID: 2504389 • Letter: A

Question

Answers Needed For A) B) & C)

Wonder Sales is authorized to issue 100,000 shares of $100 par, 2% preferred stock shares of $ 10 par common stock. On January 2nd, Wonder Sales issues 5,000 shares of preferred stock for $110 per share and 65,000 s of common stock at $10 per share. Journalize this issuance. On January 25th, Wonder Sales issued 250 shares of preferred stock to a Morton Law Firm for settlement of an invoice for incorporation services. The invoice was for $36,000. Journalize this issuance. On January 31st, Wonder Sales issues 500 shares of common stock to Setup Inc. for fixtures The fixtures have a fair market value of $8,500. Journalize this issuance.

Explanation / Answer

3(a) Journal Entry:-

Jan-2:-

Debit Cash [5000*110] = 550000

Credit Preferred Stock [5000*100] = 500000

Credit Paid in capital in excess of par value - Preferred Stock = 50000

Debit Cash [65000*10] = 650000

Credit Common Stock = 650000

3(b) ) Journal Entry:-

Jan