Question

Monty Corp. was organized on January 1, 2020. It is authorized to issue 12,000 shares of 8%, $100 par value preferred stock, and 513,000 shares of no par common stock with a stated value of $3 per share. The following stock transactions were completed during the first year: Jan. 10 Issued 77,000 shares of common stock for cash at $6 per share. Mar. 1 Issued 4,300 shares of preferred stock for cash at $105 per share. Apr. 1 Issued 25,000 shares of common stock for land. The asking price of the land was $93,000. The fair value of the land was $84,500. May 1 Issued 76,000 shares of common stock for cash at $4.50 per share. Aug 1 Issued 12,000 shares of common stock to attorneys in payment of their bill of $36,000 for services performed in helping the company organize. Sept. 1 Issued 10,500 shares of common stock for cash at $7 per share. Nov. 1 Issued 1,000 shares of preferred stock for cash at $112 per share. Journalize the transactions. (Record journal entries in the order presented in the problem. 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) Date Account Titles and Explanation Debit Credit

Answer 1

2 Credit ($) Debit ($) $462,000 $231,000 $231,000 $451,500 $21,500 $430,000 $93,000 $18,000 $75,000 AB Journal Entries Date Account Titles 10-Jan Cash Paid - in-capital in Excess of Stated Value - Common Stock Common Stock (To record the issue of common stock) 1-Mar Cash Paid-in-capital in excess of par value - Preferred Stock Preferred Stock (To record the issue of preferred stock) 1-Apr Land Paid - in capital in Excess of Stated Value - Common Stock Common Stock (To record the issue of common stock in exchange of land) 1-May Cash Paid - in - capital in Excess of Stated Value - Common Stock Common Stock (To record the issue of common stock) 1-Aug Accounts Payable Common Stock (To record the issue of common stock instead of payment) 1-Sep Cash Paid - in- capital in Excess of Stated Value - Common Stock Common Stock (To record the issue of common stock) 1-Nov cash Paid-in-capital in excess of par value - Preferred Stock Preferred Stock (To record the issue of preferred stock) 15 $342.000 $114,000 $228.000 $36,000 20 $36,000 $73,500 $42,000 $31,500 $112.000 $12,000 $100,000

Preferred Stock 1-Mar 1-Nov $430,000 $100,000 $530,000 Bal Paid-in-capital in excess of par value - preferred stock 1-Mar $21,500 1-Nov $12,000 Bal $33,500 Common Stock 10-Jan 1-Apr 1-May 1-Aug 1-Sep Bal $231,000 $75,000 $228,000 $36,000 $31,500 $601,500 Paid-in-capital in excess of stated value - Common Stock 10-Jan $231,000 1-Apr $18,000 $114,000 1-Sep $42,000 1-May Bal $405,000

M I N $601,500 $530,000 Balance Sheet (Partial) as on 31st December, 2020 3 Stockholder's Equity Contributed Capital 1 Common Stock 6 Preferred Stock Total Contributed Capita 8 Paid-in-capital 9 Paid-in-capital in excess of par value - preferred stock 10 Paid-in-capital in excess of stated value - common stock 11 Total Paid-in-capital 12 Total Stockholder's Equity 13 $1,131,500 $33,500 $405,000 $438,500 $1,570,000

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