Question

During its first year of operations, Roldan Corporation had the following transactions pertaining to its common stock. Jan. 10 Issued 60,000 shares for cash at $5 per share. July 1 Issued 50,000 shares for cash at $8 per share. Instructions:

a) Journalize the transactions, assuming that the common stock has a par value of $5 per share. (3 points)

(b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $2 per share.

On January 1, 2015, the stockholders’ equity section of Martin Corporation shows: common stock ($5 par value) $2,000,000; paid-in capital in excess of par value $1,200,000; and retained earnings $1,400,000. During the year, the following treasury stock transactions occurred.

Mar. 1 Purchased 60,000 shares for cash at $18 per share.

July 1 Sold 15,000 treasury shares for cash at $19 per share.

Sept. 1 Sold 10,000 treasury shares for cash at $17 per share.

Instructions:

Journalize the treasury stock transactions.

Answer 1

1-

ROLDEN CORPORATION -

10,JAN ISSUED 60,000 SHARES FOR CASH $5 PER SHARE

JULY 1, 50,000 SHARES FOR CASH $8 PER SHARE

A) JOURNAL ENTRIES

DATE	PARTICULAR	DEBIT	CREDIT
10 JAN	CASH (60,000*5)	$300,000
	TO COMMON STOCK		$300,000
	(TO RECORD ISSUE OF COMMON STOCK)
1,JULY	CASH (50,000*8)	400,000
	TO COMMON STOCK (50,000*5)		250.000
	TO PAID - IN- CAPITAL IN EXCESS OF PAR VALUE (50,000*3)		150,000
	( TO RECORD ISSUE OF COMMON STOCK)

B)

DATE	PARTICULAR	DEBIT	CREDIT
10 JAN	CASH	300,000
	COMMON STOCK		120,000
	PAID IN CAPITAL - IN EXCESS OF STATED VALUE (60,000*3)		180.000
	(TO RECORD ISSUE OF COMMON STOCK)
	CASH(50,000*8)	400,000
	COMMON STOCK (50,000*2)		100,000
	PAID IN CAPITAL - IN EXCESS OF STATED VALUE (60,000*3)		300,000
	(TO RECORD ISSUE OF COMMON STOCK)

MARTIN CORPORATION

B)

DATE	PARTICULAR	DEBIT	CREDIT
	TRESURY STOCK (60,000*18)	$108.000
	CASH		$108,000
	( TO RECORD PURCGASE OF TREASURY STOCK)
	CASH(15000*19)	$285000
	PAID IN CAPITAL - TREASURY STOCK(		$15000
	TREASURY STOCK(15,000*18)		$270000
	( TO TRECORD SALE OF TRESURY STOCK)
	CASH(10000*17)	$170000
	PAID IN CAPITAL - TREASURY STOCK	$10000
	TREASURY STOCK(10000*18)		$180000
	(TO RECORD SALE OF TRESURY STOCK)