Question

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.

Answer 1

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