Question

The stockholders’ equity accounts of Bridgeport Corporation on
January 1, 2020, were as follows. Preferred Stock (8%, $48 par,
10,000 shares authorized) $ 384,000 Common Stock ($1 stated value,
1,950,000 shares authorized) 1,150,000 Paid-in Capital in Excess of
Par—Preferred Stock 145,000 Paid-in Capital in Excess of Stated
Value—Common Stock 1,400,000 Retained Earnings 1,800,000 Treasury
Stock (11,000 common shares) 55,000 During 2020, the corporation
had the following transactions and events pertaining to its
stockholders’ equity. Feb. 1 Issued 26,000 shares of common stock
for $120,000. Apr. 14 Sold 5,600 shares of treasury stock—common
for $32,600. Sept. 3 Issued 4,700 shares of common stock for a
patent valued at $35,900. Nov. 10 Purchased 1,000 shares of common
stock for the treasury at a cost of $6,000. Dec. 31 Determined that
net income for the year was $400,000.
Journalize the transactions and the closing entry for net income. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Bridgeport Corporation
Journal entries
Date	General Journal	Debit	Credit
Feb 1	Cash	120,000
	Paid in capital in excess of stated value - Common stock (120000-26000)		94,000
	common stock (26000*1)		26,000
	(To record issue of common stock.)
Apr 14	Cash	32,600
	Paid in capital in excess of par value - Treasury stock (32600-28000)		4,600
	Treasury stock (5600*5)		28,000
	(To record sale of treasury stock) (cost of one treasury stock = 55000/11000= $5)
Sept 3	Patent	35,900
	Paid in capital in excess of stated value - Common stock (35900-4700)		31,200
	common stock (4700*1)		4,700
	(To record issue of common stock for patent.)
Nov 10	Treasury stock	6,000
	cash		6,000
	(To record purchase of treasury stock.)
Dec 31	Income summary	400,000
	Retained earnings		400,000
	(To record close net income.)