Question

On May 10, a company issued for cash 1,300 shares of no-par common stock (with a stated value of $2) at $17, and on May 15, it issued for cash 3,000 shares of $15 par preferred stock at $61.

Journalize the entries for May 10 and 15, assuming that the common stock is to be credited with the stated value. If an amount box does not require an entry, leave it blank.

May 10		fill in the blank 2	fill in the blank 3
		fill in the blank 5	fill in the blank 6
		fill in the blank 8	fill in the blank 9
May 15		fill in the blank 11	fill in the blank 12
		fill in the blank 14	fill in the blank 15
		fill in the blank 17	fill in the blank 18

Answer 1

For May 10
Cash will be debited by = Number of Common shares issued x Issue price per Common share
= 1,300 x 17

= $22,100
Common stock will be credited by = Number of Common shares issued x Stated value per Common share
= 1,300 x 2
= $2,600
Paid in capital in excess of stated - Common stock will be credited by = Number of Common shares issued x (Issue price per Common share - Stated value per Common share)
= 1,300 x (17 - 2)
= $19,500

Journal

Date	Account Title and Explanation	Debit	Credit
May 10	Cash	22,100
	Common stock		2,600
	Paid in capital in excess of stated - Common stock		19,500

For May 15
Cash will be debited by = Number of Preferred shares issued x Issue price per Preferred share
= 3,000 x 61

= $183,000
Preferred stock will be credited by = Number of Preferred shares issued x Par value per Preferred share
= 3,000 x 15
= $45,000
Paid in capital in excess of par - Preferred stock will be credited by = Number of Preferred shares issued x (Issue price per Preferred share - Par value per Preferred share)
= 3,000 x (61 - 15)
= $138,000

Journal

Date	Account Title and Explanation	Debit	Credit
May 15	Cash	183,000
	Preferred stock		45,000
	Paid in capital in excess of par - Preferred stock		138,000