During its first year of operations, Eastern Data Links Corporation entered into
ID: 2509931 • Letter: D
Question
During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders equity. The articles of incorporation authorized the issue of 8 million common shares, $1 par per share, and 1 million preferred shares $50 par per share. Feb. 12 Sold 2 million common shares, for $9 per share. 13 Issued 48,888 common shares to attorneys in exchange for legal services 13 Sold 88,000 of its common shares and 4,000 preferred shares for a total of $945,800 Nov. 15 Issued 380,000 of its common shares in exchange for equipment for uhich the cash price was known to be $3,688,e00 Required Prepare the appropriate journal entries to record each transaction. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) Journal entry worksheet Sold 2 m Prey7 of 15 E Next >Explanation / Answer
Answer:
Date
Description
debit $
Credit $
12-Feb
Cash (2M shares x 9 per share)
18,000,000
Common stock (2M shares x 1 par)
2,000,000
Paid-in-capital – excess of par (difference)
16,000,000
(to record the issue of share for cash)
13-Feb
Legal expenses (40,000 shares x 9 per share)
360,000
Common stock (40,000 shares x 1 par)
40,000
Paid-in-capital – excess of par (difference)
320,000
(to record the issue of share to attorney )
13-Feb
Cash
945,000
Common stock (80,000 shares x 1 par)
80,000
Paid-in-capital – excess of par, common
640,000
Preferred stock (4,000 shares x 50 par)
200,000
Paid-in-capital – excess of par, preferred
25,000
15-Nov
Property, plant, and equipment (cash value)
3,688,000
Common stock (380,000 shares x 1 par per share)
380,000
Paid-in-capital – excess of par (difference)
3,308,000
Date
Description
debit $
Credit $
12-Feb
Cash (2M shares x 9 per share)
18,000,000
Common stock (2M shares x 1 par)
2,000,000
Paid-in-capital – excess of par (difference)
16,000,000
(to record the issue of share for cash)
13-Feb
Legal expenses (40,000 shares x 9 per share)
360,000
Common stock (40,000 shares x 1 par)
40,000
Paid-in-capital – excess of par (difference)
320,000
(to record the issue of share to attorney )
13-Feb
Cash
945,000
Common stock (80,000 shares x 1 par)
80,000
Paid-in-capital – excess of par, common
640,000
Preferred stock (4,000 shares x 50 par)
200,000
Paid-in-capital – excess of par, preferred
25,000
15-Nov
Property, plant, and equipment (cash value)
3,688,000
Common stock (380,000 shares x 1 par per share)
380,000
Paid-in-capital – excess of par (difference)
3,308,000
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