Question

Budget Office Supply Corporation completed the following stock issuance transactions: Mar. 28 Issued 5,000 shares of $4 stated value common stock for cash of $20 per share May 1 Received merchandise inventory with a market value of $46,000 in exchange for 2,000 shares of the $4 stated value common stock. May 14 Issued 450 shares of 5%, $20 par value preferred stock for $50 per share Prepare the journal entries to record these transactions. Explanations are not required.

Answer 1

• All working forms part of the answer

Date	Accounts title	Debit	Credit	Working
Mar-28	Cash	$          100,000.00		5000 shares x $ 20
	Common Stock		$           20,000.00	5000 shares x $ 4 stated value
	Paid in Capital in excess of Stated Value - Common Stock		$           80,000.00	5000 shares x $ 16
	(Stock issued for cash)
May-01	Inventory	$            46,000.00		Market Value
	Common Stock		$             8,000.00	2000 shares x $ 4 stated value
	Paid in Capital in excess of Stated Value - Common Stock		$           38,000.00	46000 - 8000
	(inventory received and stock issued)
May-14	Cash	$            22,500.00		450 shares x $ 50
	Preferred Stock		$             9,000.00	450 shares x $ 20 par
	Paid in Capital in excess of Par - Preferred Stock		$           13,500.00	450 shares x $ 30
	(Preferred Stock issued)