Parker Corporation has issued 1,700 shares of common stock and 340 shares of preferred stock for...

Parker Corporation has issued 1,700 shares of common stock and 340 shares of preferred stock for a lump sum of $62,000 cash.

Give the entry for the issuance assuming the par value of the common stock was $5 and the fair value $30, and the par value of the preferred stock was $40 and the fair value $50. (Each valuation is on a per share basis and there are ready markets for each stock.) (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.)

Account Titles and Explanation	Debit	Credit

List of Accounts

Give the entry for the issuance assuming the same facts as the par value of the common stock was $5 and the fair value of $25 per share, and the par value of the preferred stock was $40 and has no ready market. (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.)

Account Titles and Explanation	Debit	Credit

Solutions

Expert Solution

Answer 1 .

Working Note :

Total fair value of common stock (1,700 shares * $30)	$51,000
Total fair value of preferred stock (340 shares * $50)	$17,000
Total	$68,000
Common Stock ; [($51,000 / $68,000) * $62,000]	$46,500
Preferred Stock ; [($17,000 / $68,000) * $62,000]	$15,500

Journal Entry :

Account Titles and Explanation

Debit

Credit

Cash

62,000

Common Stock (1,700 shares *$5)

8,500

Preferred Stock (340 shares *$40)

13,600

Paid-in Capital in Excess of Par - Common Stock ($46,500 - $8,500)

38,000

Paid-in Capital in Excess of Par - Preferred Stock ($15,500 - $13,600)

1,900

(To record lump sum purchase of common & preferred stocks)

Answer 2 :

Account Titles and Explanation	Debit	Credit
Cash	62,000
Common Stock (1,700 shares *$5)		8,500
Preferred Stock (340 shares *$40)		13,600
Paid-in Capital in Excess of Par - Common Stock [(1,700 shares *($25 - $5)]		34,000
Paid-in Capital in Excess of Par - Preferred Stock (Bal. fig)		5,900
(To record lump sum purchase of common & preferred stocks)

ekkarill92 answered 2 hours ago

Next > < Previous

Related Solutions

Coronado Industries has issued 2,300 shares of common stock and 460 shares of preferred stock for...

Coronado Industries has issued 2,300 shares of common stock and 460 shares of preferred stock for a lump sum of $87,000 cash. Give the entry for the issuance assuming the par value of the common stock was $5 and the fair value $30, and the par value of the preferred stock was $40 and the fair value $50. (Each valuation is on a per share basis and there are ready markets for each stock. Give the entry for the issuance...

Coronado Industries has issued 1,500 shares of common stock and 300 shares of preferred stock for a lump sum

Coronado Industries has issued 1,500 shares of common stock and 300 shares of preferred stock for a lump sum of $55,000 cash. 1). Give the entry for the issuance assuming the par value of the common stock was $5 and the fair value $30, and the par value of the preferred stock was $40 and the fair value $50. (Each valuation is on a per share basis and there are ready markets for each stock.) 2). Give the entry for...

Bluefield Corporation has 6 million shares of common stock outstanding, 600,000 shares of preferred stock that...

Bluefield Corporation has 6 million shares of common stock outstanding, 600,000 shares of preferred stock that pays an annual dividend of $8, and 200,000 bonds with a 10 percent coupon (semiannual interest) and 20 years to maturity. At present, the common stock is selling for $50 per share, the bonds are selling for $950.62 per $1,000 of face value, and the preferred stock is selling at $74 per share. The estimated required rate of return on the market is 13...

Carmen Company is a corporation that has issued both preferred and common stock. As of January...

Carmen Company is a corporation that has issued both preferred and common stock. As of January 1, it had 50,000 shares of 2.75%, $100 par, preferred stock outstanding and 250,000 shares of $10 par common stock outstanding. a. On January 31, the board of directors issues a requirement to purchase 5,000 shares of its common stock at market price. The shares are purchased at a market price of $22 per share. Journalize the purchase utilizing the cost concept. Jan. 31...

To expand operations, Aragon Consulting issued 1,700 shares of previously unissued common stock with a par...

To expand operations, Aragon Consulting issued 1,700 shares of previously unissued common stock with a par value of $1. The price for the stock was $50 per share. Required: 1-a. Complete the table below, indicating the account, amount, and direction of the effect for the stock issuance. (PLEASE PUT INTO ASSET = LI + STOCK E (format) 1-b. Prepare the journal entry for the stock issuance. (PLEASE PUT INTO JOURNAL FORMAT) 2-a. Complete the table below, indicating the account, amount,...

Titan Mining Corporation has 9.7 million shares of common stock outstanding, 410,000 shares of preferred stock...

Titan Mining Corporation has 9.7 million shares of common stock outstanding, 410,000 shares of preferred stock outstanding, and 215,000 bonds outstanding with a par value of $1,000 each. The common stock currently sells for $45 per share and has a beta of 1.35, the preferred stock currently sells for $95 per share, and the bonds sell for 116 percent of par. The cost of common equity is 16.48 percent, preferred equity is 4.21 percent, and the debt's yield to maturity...

Titan Mining Corporation has 8.9 million shares of common stock outstanding, 330,000 shares of preferred stock...

Titan Mining Corporation has 8.9 million shares of common stock outstanding, 330,000 shares of preferred stock outstanding, and 175,000 bonds outstanding with a par value of $1,000 each. The common stock currently sells for $37 per share and has a beta of 1.45, the preferred stock currently sells for $87 per share, and the bonds sell for 118 percent of par. A. The cost of common equity is 15.17 percent, preferred equity is 5.75 percent, and the debt's yield to...

The Monroe Corporation has 100,000 common shares issued and outstanding. This stock was issued several years...

The Monroe Corporation has 100,000 common shares issued and outstanding. This stock was issued several years ago at a price above the $10 per share par value. During the current year, the board of directors declared a 30 percent stock dividend so that 30,000 new shares were issued to the stockholders when the price of the stock was $30 per share. As a result of this dividend, what reduction was recorded in the reported amount of retained earnings ? __$600,000...

ABC Corporation has 1/2 million shares of common stock outstanding, 1 million shares of preferred stock,...

ABC Corporation has 1/2 million shares of common stock outstanding, 1 million shares of preferred stock, and 20,000 4.5% semiannual bonds outstanding. The common stock has a beta of 1.2. The corporate bond has a par value of $1,000 each and matures in 21 years. Currently the bonds are selling at 104% of their face values. The market risk premium is 10%. The risk-free rate is 2.5%. The common stock sells for $75 per share. The preferred stock sells for...

Anderson Corporation has 1 million shares of common stock outstanding, 1/2 million shares of preferred stock,...

Anderson Corporation has 1 million shares of common stock outstanding, 1/2 million shares of preferred stock, and 20,000 3.5% semiannual bonds outstanding. The common stock has a beta of 1.2. The corporate bond has a par value of $1,000 each and matures in 14 years. Currently the bonds are selling at 94% of their face values. The market risk premium is 9%. The risk-free rate is 3%. The common stock sells for $40 per share. The preferred stock sells for...

Subjects