Question

Please write the following transactions journal entries

On Jan.1 2014, GMC issued 4,000 shares of $ 2.5 par value common stock and 3,000 shares of $ 2 par value preferred stock at par.

On Jan.1 2014, GMC issued 1,000 shares of $ 2.5 par value common stock in return of machine costing $ 2,200 (fair value BD 2,900)

On Jan.2 2014, GMC issued 500 shares of $ 2.5 par value common stock to its stock promoters in exchange for their services estimated to be worth $ 1,600

Answer 1

Journal Entries:

Date	Accounts Titles and Explanation	Debit	Credit
Jan. 1, 2014	Cash ($10,000 + $6,000)	$16,000
	Common Stock (4,000 shares * $2.5 par value)		$10,000
	Preferred Stock (3,000 shares * $2 par value)		$6,000
	(To record the issue of common stock and preferred stock)
Jan. 1, 2014	Machine	$2,200
	Discount on issue of Common Stock ($2,500 - $2,200)	$300
	Common Stock (1,000 shares * $2.5 par value)		$2,500
	(To record the issue of common stock with discount)
Jan. 2, 2014	Preliminary Expenses	$1,600
	Common Stock (500 shares * $2.5 par value)		$1,250
	Premium on Common Stock ($1,600 - $1,250)		$350
	(To record the issue of common stock to stock promoters)