Date Account Titles and Explanation Debit Credit Preferred Stock Paid-in Capital

Question

Date

Account Titles and Explanation

Debit

Credit

Preferred Stock

Paid-in Capital in Excess of Par Value—Preferred Stock

Common Stock

Paid-in Capital in Excess of Stated Value—Common Stock

Culver Corporation was organized on January 1, 2017. It is authorized to issue 22,800 shares of 6%, $50 par value preferred stock and 468,000 shares of no-par common stock with a stated value of $3 per share. The following stock transactions were completed during the first year.
Jan. 10 Issued 74,000 shares of common stock for cash at $6 per share. Mar. 1 Issued 1,280 shares of preferred stock for cash at $54 per share. May 1 Issued 119,000 shares of common stock for cash at $5 per share. Sept. 1 Issued 5,800 shares of common stock for cash at $4 per share. Nov. 1 Issued 3,800 shares of preferred stock for cash at $60 per share.

Explanation / Answer

Solution:

Stated value is the minimum value of share and the common stock is recorded at that stated value.

Journal Entries

Date

General Journal

Debit

Credit

Jan.10

Cash (74,000 Shares x $6)

$444,000

Common Stock (Stated Value $3 x 74,000 Shares)

$222,000

Paid in Capital in excess of par - Common Stock (3 x 74,000 Shares)

$222,000

Mar.1

Cash (1280 Shares x $54)

$69,120

Preferred Stock (Par Value $50 x 1280 Shares)

$64,000

Paid in Capital in excess of par - Preferred Stock (4 x 1280 Shares)

$5,120

May.1

Cash (119,000 Shares x $5)

$595,000

Common Stock (Stated Value $3 x 119,000 Shares)

$357,000

Paid in Capital in excess of par - Common Stock (2 x 119,000 Shares)

$238,000

Sept.1

Cash (5,800 Shares x $4)

$23,200

Common Stock (Stated Value $3 x 5,800 Shares)

$17,400

Paid in Capital in excess of par - Common Stock (1 x 5,800 Shares)

$5,800

Nov.1

Cash (3800 Shares x $60)

$228,000

Preferred Stock (Par Value $50 x 3800 Shares)

$190,000

Paid in Capital in excess of par - Preferred Stock (10 x 3800 Shares)

$38,000

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Date

General Journal

Debit

Credit

Jan.10

Cash (74,000 Shares x $6)

$444,000

Common Stock (Stated Value $3 x 74,000 Shares)

$222,000

Paid in Capital in excess of par - Common Stock (3 x 74,000 Shares)

$222,000

Mar.1

Cash (1280 Shares x $54)

$69,120

Preferred Stock (Par Value $50 x 1280 Shares)

$64,000

Paid in Capital in excess of par - Preferred Stock (4 x 1280 Shares)

$5,120

May.1

Cash (119,000 Shares x $5)

$595,000

Common Stock (Stated Value $3 x 119,000 Shares)

$357,000

Paid in Capital in excess of par - Common Stock (2 x 119,000 Shares)

$238,000

Sept.1

Cash (5,800 Shares x $4)

$23,200

Common Stock (Stated Value $3 x 5,800 Shares)

$17,400

Paid in Capital in excess of par - Common Stock (1 x 5,800 Shares)

$5,800

Nov.1

Cash (3800 Shares x $60)

$228,000

Preferred Stock (Par Value $50 x 3800 Shares)

$190,000

Paid in Capital in excess of par - Preferred Stock (10 x 3800 Shares)

$38,000

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.