I need help ASAP. MY HOMEWORK IS DUE IN A FEW HOURS. THANK YOU :) Exercise 15-5

Question

I need help ASAP. MY HOMEWORK IS DUE IN A FEW HOURS. THANK YOU :)

Exercise 15-5 Tamarisk Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $121,000. (a) Prepare the journal entry for the issuance when the market price of the common shares is $164 each and market price of the preferred is $205 each. (b) Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $212 per share. (Round answers to 0 decimal places, e.g. $1,225. 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 Click if you would like to Show Work for this question: Qpen Show Work

Explanation / Answer

Answer a )

Working Note : -  

Total Market value of common stock

500 shares * $164

Total Market value of preferred stock

100 shares * $205

Receipt from common stock = ($82,000 / 102,500) * $121,000 = $96,800

Receipt from preferred stock = ($20,500 / 102,500) * $121,000 = $24,200

Paid in Capital in Excess at Par - Common

($96,800 - $5,000)

Paid in Capital in Excess at Par -Preferred

($24,200 - $10,000)

Answer b )

Working Note : -  

Receipt from common stock = 500 shares * $212 = $106,000

Receipt from preferred stock = $121,000 - $106,000 = $15,000

Paid in Capital in Excess at Par - Common

($106,000 - $5,000)

Paid in Capital in Excess at Par - Preferred

($15,000 - $10,000)

Total Market value of common stock

500 shares * $164

$82,000

Total Market value of preferred stock

100 shares * $205

$20,500 Total $102,500

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