[The following information applies to the questions displayed below.] Tarrant Co

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[The following information applies to the questions displayed below.]

Tarrant Corporation was organized this year to operate a financial consulting business. The charter authorized the following stock: common stock, par value $15 per share, 12,000 shares authorized. During the year, the following selected transactions were completed:

At year-end, the accounts reflected income of $7,100. No dividends were declared.

a. Sold and issued 7,400 shares of common stock for cash at $30 per share. b. Sold and issued 2,500 shares of common stock for cash at $35 per share. c.

At year-end, the accounts reflected income of $7,100. No dividends were declared.

Requirec 1. Prepare the jourmal entries required to record the sale of common stock in (a) and (b). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Sold 7,400 shares of common stock for cash at s30 per share. Note: Enter debits before credits. Transaction General Journal DebitCredit Record entry Clear entry View general journal

Explanation / Answer

Solution:

1) Preparing the Journal Entries Required to Record the Sale of Common Stock in (a) and (b):

2) Preparing the Stockholder's Equity Section as it should be reported on the Year End Balance Sheet:

TARRANT CORPORATION

Partial Balance Sheet

At December 31, this Year

Event General Journal Debit Credit a Cash (7,400 * $30) $222,000 Common Stock (7,400 * $15) $111,000 Capital in Excess of Par $111,000 (To Record the Sale of Common Stock at a Premium) b Cash (2,500 * $35) $87,500 Common Stock (2,500 * $15) $37,500 Capital in Excess of Par $50,000 (To Record the Sale of Common Stock at a Premium)

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