Question

In: Accounting

2. United Rentals Corporation is authorized to issue 100,000 shares of 5%, $60 par value preferred...

2. United Rentals Corporation is authorized to issue 100,000 shares of 5%, $60 par value preferred stock and 5,000,000 shares of no-par common stock with a stated value of $3 per share. During 2016, its first year of operation, the company has the following transactions.

Jan. 1 Issued 15,000 shares of preferred stock for cash at $105 per share.

Jan. 15 Issued 500,000 shares of common stock for cash at $10 per share.

Mar. 2 Issued 20,000 shares of common stock for land. The land had an

asking price of $310,000. The stock is currently selling

on a national exchange at $15 per share.

Apr. 30 Issued 4,000 shares of common stock to attorneys in payment of

their bill for $72,000 for legal services rendered in helping the

company incorporate.

Sept. 5 Purchased 12,000 shares of its own common stock at

$17 per share.

Dec. 6 Sold 8,000 shares of the treasury stock at $20 per share.

Dec. 10 Sold the remaining treasury stock for $15 per share.

INSTRUCTIONS

Journalize the transactions for United Rentals Corporation.

Expert Solution

Journal entry :

Date	account and explanation	debit	credit
Jan 1	Cash (15000*105)	1575000
	Preferred Stock		900000
	Paid in capital in excess of par value-Preferred stock		675000
	(To record issue common Stock)

Jan 15	Cash (500000*10)	5000000
	Common Stock (500000*3)		1500000
	paid in capital in excess of stated value-Common Stock		3500000
	(To record issue common Stock)

Mar 2	Land	310000
	Common Stock (20000*3)		60000
	Paid in capital in excess of stated value-Common Stock		250000
	(To record common Stock)

Apr 30	Organisation fees	72000
	Common Stock (4000*3)		12000
	paid in capital in excess of stated value-Common Stock		60000
	(To record common Stock)

Sep 5	Treasury stock (12000*17)	204000
	Cash		204000
	(To record treasury stock purchase)

Dec 6	Cash (8000*20)	160000
	Treasury stock (8000*17)		136000
	Paid in capital from sale of treasury stock		24000
	(To record sold treasury stock)

Dec 10	Cash (4000*15)	60000
	Paid in capital from sale of treasury stock	8000
	Treasury stock (4000*17)		68000
	(To record sale of treasury stock)

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