Question

6

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Entries for Issuing No-Par Stock On May 15, Helena Carpet Inc., a carpet wholesaler, issued for cash 270,000 shares of no-par common stock (with a stated value of $5) at $15, and on June 30, it issued for cash 15,000 shares of preferred stock, $60 par at $67. a. Journalize the entries for May 15 and June 30, assuming that the common stock is to be credited with the stated value. If an amount box does not require an entry, leave it blank. May 15 June 30 b. What is the total amount invested (total paid-in capital) by all stockholders as of June 30?

Answer 1

Solution

Date	Accounts title and explanation	Debit	credit
May-15	Cash	$ 4,050,000.00
	Common stock		$ 1,350,000.00
	Paid in capital in excess of stated value-Common stock		$ 2,700,000.00
	(To record issue of stock)
Jun-30	Cash	$ 1,005,000.00
	Preferred stock		$     900,000.00
	Paid in capital in excess of par value-Preferred stock		$     105,000.00
	(To record issue of stock)

Working

Amount of total paid in capital by all stockholders

5,055,000.00*

*1005000+4050000