Question

Ryayal Corporation was organized on January 1, 2020. It is authorized to sue 10,000 shares of 8%, $100 par value preferred stock, and 450,000 shares of no-par common stock with stated value of $2 per share. The following stock transactions were completed during the first year. Dan. 10 Issued 75,000 shares of common stock for cash at $4 per share. Mar. 1 Issued 4,000 shares of preferred stock for cash at $105 per share. Apr. 1 Issued 22,000 shares of common stock for land. The asking price of the land was $85,000. The fair value of the land was $80,000. tay 1 Issued 75,000 shares of common stock for cash at $4.25 per share, Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $35,000 for services performed in helping the company organize. Sept. 1 Issued 10,000 shares of common stock for cash at $5 per share. Nov. 1 Issued 1,000 shares of preferred stock for cash at $108 per share.

Answer 1

Journal entries

Date	account and explanation	Debit	Credit
Jan 10	Cash (75000*4)	300000
	Common Stock		150000
	Paid in capital in excess of stated value-Common Stock		150000
Mar 1	Cash (4000*105)	420000
	Preferred stock		400000
	Paid in capital in excess of par value-Preferred stock		20000
Apr 1	Land	85000
	Common Stock (22000*2)		44000
	Paid in capital in excess of stated value-Common Stock		41000
May 1	Cash (75000*4.25)	318750
	Common Stock		150000
	Paid in capital in excess of stated value-Common Stock		168750
Aug 1	Organization expense	35000
	Common Stock		20000
	Paid in capital in excess of stated value-Common Stock		15000
Sept 1	Cash	50000
	Common Stock		20000
	Paid in capital in excess of stated value-Common Stock		30000
Nov 1	Cash (1000*108)	108000
	Preferred stock		100000
	Paid in capital in excess of par value-Preferred Stock		8000