Question

Question 2 0.8/1 View Policies Show Attempt History Current Attempt in Progress . Your answer is partially correct. Pina Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $123,000. (a) Prepare the journal entry for the issuance when the market price of the common shares is $168 each and market price of the preferred is $210 each. Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $216 per share. (b) (Round answers to decimal places, e.g. $1,225. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter for the amounts.) Debit Credit No. Account Titles and Explanation (a) Cash L 123.000 Paid-in Capital in Excess of Par - Common Stock Common Stock 5000 Paid-in Capital in Excess of Par-Preferred Stock Preferred Stock 10.000 (b) Cash 123.000 Paid-In Capital in Excess of Par-Common Stock 103000 Common Stock 5000 Paid-in Capital in Excess of Par-Preferred Stock Preferred Stock 10,000

Answer 1

No. Credit | Debit $ 123,000 a Account title and explanation Cash Common Stock (500 X $10) Paid-in Capital in Excess of Par- Common Stock ($98,400 - $5,000) Preferred Stock (100 X $100) Paid-in Capital in Excess of Par-Preferred Stock ($24.600 - $10,000) $ 5,000 $ 93,400 $ 10,000 S 14.600 $ 123,000 Cash Common Stock (500 X $10) Paid-in Capital in Excess of Par- Common Stock (500 x ($216-$10)) Preferred Stock (100 X $100) Paid-in Capital in Excess of Par-Preferred Stock ($24,600 - $10,000) $5,000 $ 103,000 $ 10.000 $ 5,000 Working note for (a): Fair Value of Common (500 X $168) Fair Value of Preferred (100 X $210) S 84.000 $ 21,000 $ 105,000 Allocated to Common: $84.000/$105,000 X $123,000 Allocated to Preferred: $21,000/$105,000 X $123,000 Total allocation $ 98,4001 | $ 24,600 S 123,000