DeLong Corporation was organized on January 1, 2019. It is authorized to issue 1

Question

DeLong Corporation was organized on January 1, 2019. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year:

Issued 1,000 shares of preferred stock for cash at $109 per share.

Journalize the transactions

Prepare the paid-in capital section of stockholders’ equity at December 31, 2019

Jan. 10 Issued 80,000 shares of common stock for cash at $4 per share. Mar. 1 Issued 5,000 shares of preferred stock for cash at $105 per share. Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000. The fair value of the land was $85,000. May 1 Issued 80,000 shares of common stock for cash at $4.50 per share. Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $30,000 for services performed in helping the company organize. Sept. 1 Issued 10,000 shares of common stock for cash at $5 per share. Nov. 1

Issued 1,000 shares of preferred stock for cash at $109 per share.

Journalize the transactions

Prepare the paid-in capital section of stockholders’ equity at December 31, 2019

Explanation / Answer

Journal Entry Date Account Name Debit Credit 10-Jan Cash A/c (80000*4) $           320,000                    To Common Stock (80000*2) $                   160,000                     To paid in capital in excess of stated common stock (80000*2) $                   160,000 1-Mar Cash A/c (5000*105) $           525,000                  To Preferred Stock (5000*100) $                   500,000                  To Paid in capital in excess of Preferred Stock (5000*5) $                     25,000 1-Apr Land A/c $             85,000                To Common Stock (24000*2) $                     48,000                     To paid in capital in excess of stated common stock $                     37,000 1-May Cash A/c (80000*4.5) $           360,000                    To Common Stock (80000*2) $                   160,000                     To paid in capital in excess of stated common stock (80000*2.5) $                   200,000 1-Aug Organization Expenses $             30,000                    To Common Stock (10000*2) $                     20,000                     To paid in capital in excess of stated common stock $                     10,000 1-Sep Cash A/c (10000*5) $             50,000                    To Common Stock (10000*2) $                     20,000                     To paid in capital in excess of stated common stock (10000*3) $                     30,000 1-Nov Cash A/c (1000*109) $           109,000                  To Preferred Stock (1000*100) $                   100,000                  To Paid in capital in excess of Preferred Stock (1000*9) $                       9,000 Stockholder's equity Account Preferred Stock Date Credit Balance 1-Mar $                                                                                             500,000 $           500,000 1-Nov $                                                                                             100,000 $           600,000 Common Stock Date Credit Balance 1-Jan $                                                                                             160,000 $           160,000 1-Apr $                                                                                               48,000 $           208,000 1-May $                                                                                             160,000 $           368,000 1-Aug $                                                                                               20,000 $           388,000 1-Sep $                                                                                               20,000 $           408,000 Paid in capital in excess of Preferred Stock Date Credit Balance 1-Mar $                                                                                               25,000 $             25,000 1-Nov $                                                                                                  9,000 $             34,000 paid in capital in excess of stated common stock Date Credit Balance 1-Jan $                                                                                             160,000 $           160,000 1-Apr $                                                                                               37,000 $           197,000 1-May $                                                                                             200,000 $           397,000 1-Aug $                                                                                               10,000 $           407,000 1-Sep $                                                                                               30,000 $           437,000 Paid in capital Section of Stockholder's equity Preferred Stock $           600,000 Common Stock $           408,000 paid in capital in excess of preferred stock $             34,000 Paid in capital in excess of stated common stock $           437,000 Paid in Capital of Stockholder's equity $       1,479,000

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