Nash Corporation is authorized to issue 55,000 shares of $5 par value common sto

Question

Nash Corporation is authorized to issue 55,000 shares of $5 par value common stock. During 2017, Nash took part in the following selected transactions.

1. Issued 4,500 shares of stock at $42 per share, less costs related to the issuance of the stock totaling $9,100.
2. Issued 1,200 shares of stock for land appraised at $55,000. The stock was actively traded on a national stock exchange at approximately $43 per share on the date of issuance.
3. Purchased 480 shares of treasury stock at $44 per share. The treasury shares purchased were issued in 2013 at $41 per share.

(a) Prepare the journal entry to record item 1.
(b) Prepare the journal entry to record item 2.
(c) Prepare the journal entry to record item 3 using the cost method.

(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.
Account Titles and Explanation
Debit
Credit
(a)
(b)
(c)

Explanation / Answer

Nash Corporation General Journal No. Accounts Titles and Explanation Debit Credit a Cash [(4500 Shares X$42 Market price/Share)- $9100 of issue costs]        1,79,900 Common Stock (4500 Shares X$5 par value/Share)            22,500 Paid in capital in excess of par -Common Stock 9plug)        1,57,400 Issued 4,500 shares of stock at $42 per share, less costs related to the issuance of the stock totaling $9,100. b Land (1200 Shares X$43 Market Price /Share)            51,600 Common Stock (1200 Shares X$5 par value/Share)              6,000 Paid in capital in excess of par -Common Stock (plug)            45,600 Issued 1,200 shares of stock for land Note:The fair value of the stock ($51,600) is used to value the exchange because it is a more objective measure than the appraised value of the land ($55,000) c Treasury Stock (480 Shares X $44 Cost /Share)            21,120 Cash            21,120

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