In: Accounting
Kathleen Battle Corporation was organized on January 1, 2014. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year
Jan 10. Issued 80,000 shares of common stock for cash at $5 per share
Mar 1, Issued 5,000 shares of preferred stock for cash at $108 per share
April 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000, the fair value of the land was $80,000
May 1, Issued 80,000 shares of common stock at $7 per share
Aug 1, Issued 10,000 shares of common stock to attorneys in payment of their bill $50,000 for services rendered in helping the company organize
Sept. 1 Issued 10,000 share of common stock for cash $9 per share
Nov. 1 Issued 1,000 shares of preferred stock for cash $112 per share
Instructions
Prepare journal entries to record the above transaction.
Journal entries
Date | Account and explanation | Debit | Credit |
Jan 10 | Cash (80000*5) | 400000 | |
Common stock | 80000 | ||
Paid in capital in excess of stated value-Common Stock | 320000 | ||
Mar 1 | Cash (5000*108) | 540000 | |
Preferred stock | 500000 | ||
Paid in capital in excess of par value-Preferred stock | 40000 | ||
Apr 1 | Land | 90000 | |
Common Stock | 24000 | ||
Paid in capital in excess of stated value-Common Stock | 66000 | ||
May 1 | Cash (80000*7) | 560000 | |
Common Stock | 80000 | ||
Paid in capital in excess of stated value-Common Stock | 480000 | ||
Aug 1 | Organization expense | 50000 | |
Common Stock | 10000 | ||
Paid in capital in excess of stated value-Common Stock | 40000 | ||
Sept 1 | Cash | 90000 | |
Common Stock | 10000 | ||
Paid in capital in excess of stated value-Common Stock | 80000 | ||
Nov 1 | Cash (1000*112) | 112000 | |
Preferred stock | 100000 | ||
Paid in capital in excess of Par value-Preferred Stock | 12000 | ||