In: Accounting
Pronghorn Corporation issued 392 shares of $10 par value common
stock and 128 shares of $50 par value preferred stock for a lump
sum of $17,424. The common stock has a market price of $20 per
share, and the preferred stock has a market price of $90 per
share.
Prepare the journal entry to record the issuance.
Accounts title |
Debit |
Credit |
Cash |
$17,424 |
|
Common Stock |
$3,920 |
|
Paid in Capital in excess of Par - Common Stock |
$3,136 |
|
Preferred Stock |
$6,400 |
|
Paid in Capital in excess of Par - Preferred Stock |
$3,968 |
|
(Stock issued for cash) |
No. of shares |
Market Price |
Total |
Percent of total [not rounded off] |
|
Common Stock |
392 |
$20 |
$7,840 |
40.4958678% |
Preferred Stock |
128 |
$90 |
$11,520 |
59.5041322% |
Total fair Market Value |
$19,360 |
100.0000000% |
Working |
Common Stock |
Preferred Stock |
|
A |
Total Lumpsum Issue Price |
$17,424 |
$17,424 |
B |
Allocation % |
40.495868% |
59.504132% |
C = A x B |
Total |
$7,056 |
$10,368 |
D |
No. of shares |
392 |
128 |
E |
Par Value |
$10 |
$50 |
F = D x E |
Capital Stock credited by |
$3,920 |
$6,400 |
G = C - F |
Paid in Capital credited by |
$3,136 |
$3,968 |