Question

Belo Corporation is authorized to issue 900,000 shares of $10 par value common stock, and 200,000 shares of 9%, $100 par value preferred stock. On January 1, 2018, the second year of operations, the retained earnings balance was $80,000. During 2018, the company had the following stock transactions.

Jan. 7 ​Issued 150,000 shares of common stock at $15 per share.

May. 5 ​Attorneys for the company accepted 250 shares of common stock as payment for legal services rendered. The legal services are estimated to have a value of $4000

June 1   Issued 10,000 share of preferred a stock at $150 per share.

July 4​Issued 20,000 shares of common stock in exchange for a building. The building was advertised for $200,000. Basil’s Corporation's common stock has been actively traded on the stock exchange at $20 per share at the time of the exchange.

Sept. 1 ​Purchased 10,000 shares of common stock for the treasury at $20 per share.

Oct. 2 ​Sold 4,000 shares of the treasury stock at $21 per share.

Dec. 20 ​Sold 4,000 shares of the treasury stock at $12 per share.

Required: Journalize the 2018 transactions for Basil’s Corporation.

Answer 1

Date	Account Titles and Explanation	Debit	Credit
7-Jan	Cash (150,000 x $15)	$ 2,250,000.00
	Common Stock (150,000 x $10)		$ 1,500,000.00
	Paid-In Capital in Excess of Par Value- Common		$    750,000.00
5-May	Organization Expense	$        4,000.00
	Common Stock (250 x $10)		$        2,500.00
	Paid-In Capital in Excess of Par Value- Common		$        1,500.00
1-Jun	Cash (10,000 x $150)	$ 1,500,000.00
	Preferred Stock (10,000 x $100)		$ 1,000,000.00
	Paid-In Capital in Excess of Par Value—Preferred		$    500,000.00
4-Jul	Building	$    400,000.00
	Common Stock (20,000 x $10)		$    200,000.00
	Paid-In Capital in Excess of Par Value- Common		$    200,000.00
1-Sep	Treasury Stock	$    200,000.00
	Cash (10000 x $20)		$    200,000.00
2-Oct	Cash (4000 x $21)	$      84,000.00
	Treasury Stock (4000 x $20)		$      80,000.00
	Paid in capital in excess of par value value - Treasury	$        4,000.00
20-Dec	Cash (4000 x $12)	$      48,000.00
	Paid in capital in excess of par value value - Treasury	$        4,000.00
	Retained Earnings	$      28,000.00
	Treasury Stock (4000 x $20)		$      80,000.00