On May 1, 10,000 shares of $10 par common stock were issued at $30, and on May 7
ID: 2586719 • Letter: O
Question
On May 1, 10,000 shares of $10 par common stock were issued at $30, and on May 7, 5,000 shares of $50 par preferred stock were issued at $111.
1. Journalize the entries for May 1 and May 7. Refer to the Chart of Accounts for exact wording of account titles. This journal should include 6 rows, be sure to include correct dates as well.
Chart of Accounts
ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Supplies 151 Prepaid Insurance 181 Land 191 Buildings 192 Accumulated Depreciation-Building 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Preferred Stock 312 Paid-In Capital in Excess of Par-Preferred Stock 321 Common Stock 322 Paid-In Capital in Excess of Par-Common Stock 323 Paid-In Capital in Excess of Stated Value-Common Stock 331 Treasury Stock 332 Paid-In Capital from Sale of Treasury Stock 336 Stock Dividends Distributable 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Rent Expense 534 Insurance Expense 535 Supplies Expense 536 Organizational Expenses 561 Depreciation Expense-Building 562 Depreciation Expense-Equipment 590 Miscellaneous Expense 710 Interest ExpenseExplanation / Answer
Date Particulars Debit Credit 1-May Cash (10,000*$30) $ 300,000.00 Common Stock (10,000*$10) $ 100,000.00 Paid-In Capital in Excess of Par-Common Stock (10,000*$(30-10) $ 200,000.00 7-May Cash (5,000*$111) $ 555,000.00 Preferred Stock (5,000*$50) $ 250,000.00 Paid-In Capital in Excess of Par-Preferred Stock (5,000*$(111-50) $ 305,000.00
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