Question

The Stockholder Equity accounts of Evangeline's on January 1, 2019 appear below:

Common Stock, $5 par value, 225,000 shares authorized,

25,000 shares issued and outstanding $125,000

Additional Paid In Capital - Common Stock           175,000

Retained Earnings             87,950

During the year, the following transactions occurred:   

a. Issued 15,000 shares of Preferred Stock, 5.5%, $100 par value for $185 cash per share.

b. Issued 28,000 shares of common stock for $13 cash per share

c. Purchased 8,000 shares of common stock at $19 cash per share

d. Sold 5,000 shares of the treasury shares acquired for $25 per share.

e. Sold 1,500 shares of treasury stock for $18 per share.

Prepare the journal entries to record the transactions listed, (a) through (e).

Answer 1

No.	particulars	Debit	Credit
a.	Cash (15000 × $185)	$2,775,000
	5.5% Preferred Stock (15000 × $100)		$1,500,000
	Paid in capital in excess of par value (TS) (15000 × $85)		$1.275,000
	(issue 15000 preferred stock @ $185)
b	Cash (28000 × $13)	$364,000
	Common stock (28000 h $5)		$140,000
	Paid in capital in excess of par value (280010 × $8)		$224,000
	(28,000 common stock issued at $13 per share)
c	Treasury Stock (8000 × $19)	$152,000
	Cash (81000 × $19)		$152,000
	(being purchase of 8000 common stock as Treasury stock @ 19)
d	Cash (5000 × $25)	$125,000
	Treasury Stock (5000 × $19)		$95,000
	Paid in capital in excess of par value (5000 × $25-$19)		$30,000
	(sale of 5000 Common stock held as Treasury stock @ 25)
e.	Cash (1500 × $18)	$27,000
	Paid in capital (1500 × $1)	$1,500
	Treasury stock (1500 × $19)		$28,500
	(sale of 1500 Common stock held as Treasury stock @ 18)