Question

In 2017, the Hicklien Corporation was formed. The corporate charter authorizes the issuance of 10,000,000 shares of $1 par value common stock, and 4,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock.      The following selected transactions took place in 2017:

>1,200,000 shares of common stock were issued for cash.   The market price of the stock was $10 per shares.

>25,000 shares of common stock were issued for land.   The asking price of the land was $270,000.   The fair value of the land was $239,500.

>200,000 shares of preferred stock were issued for cash. The market price of the stock was $95.

>10,000 shares of common stock were issued to attorneys in payment of their bill for $35,000 of services performed during the company’s organization.

>5,000 shares of preferred stock were issued for cash.   The market price of the stock was $100

>15,000 shares of preferred stock were issued for machinery and equipment.   The fair value of the machinery and equipment was $1,650,000.   The stock was selling in the market at $102 per share.

INSTRUCTIONS:

JOURNALIZE the 2017 transactions above in general journal form.

Answer 1

Journalize the transaction in 2017
date	Account titles & explanation	Debit	Credit
	1,200,000 shares of common stock were issued for cash.   The market price of the stock was $10 per shares.
1	Cash A/c (1,200,000*$10)	$12,000,000
	To common stock (1200,000*$1)		$1200,000
	To paid in capital inexcess of par value - common Stock		$10,800,000
	(being Common stock Issued for cash has been recorded)
2	25,000 shares of common stock were issued for land.   The asking price of the land was $270,000.   The fair value of the land was $239,500.
	land A/c	$239,500
	To common stock (25000*$1)		$25000
	To paid in capital inexcess of par value - common Stock		$214,500
	(being Common stock Issued in exchage of land has been recorded)
3	200,000 shares of preferred stock were issued for cash. The market price of the stock was $95
	cash A/c (200,000*$95)	$19,000,000
	To preferred Stock A/c (200,000*$5)		$1000,000
	To paid in capital inexcess of par value - Preferred Stock		$18,000,000
	(being Preferred stock Issued for cash has been recorded)
4	10,000 shares of common stock were issued to attorneys in payment of their bill for $35,000 of services performed during the company’s organization
	organization Expenses A/c	$35000
	To Common Stock A/c (10,000*$1)		$10,000
	To paid in capital inexcess of par value - common Stock		$25000
	(being Common stock issued for bill payable has been recorded)
5	5,000 shares of preferred stock were issued for cash.   The market price of the stock was $100
	cash A/c (5,000*$100)	$500,000
	To preferred Stock A/c (5,000*$5)		$25000
	To paid in capital inexcess of par value - Preferred Stock		$475,000
	(being Preferred stock Issued for cash has been recorded)
6	15,000 shares of preferred stock were issued for machinery and equipment.   The fair value of the machinery and equipment was $1,650,000.
	Machinery & Equipment A/c	$1650,000
	To preferred Stock (15000*$5)		$75000
	To paid in capital inexcess of par value - Preferred Stock		$1575,000
	(being prefered Stock issued in exchange of machinery & Equipment has been recorded)