Question

Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $1 par value. During its first year, the following selected transactions were completed:

a.	Issued 6,800 shares of common stock for cash at $28 per share.
b.	Issued 2,800 shares of common stock for cash at $31 per share.

E11-2 Part 1 Required: 1. Complete the table below, indicating the account, amount, and direction of the effect for the above transactions. (Enter any decreases to account balances with a minus sign.) Stockholders' Equity Liabilities Assets а. b.

Answer 1

Answer to Requirement 1: Assets Liabilities +Stockholders' Equity Cash (6800x$28) $ 190,400.00 $ 6,800.00 Common Stock (6800 x $1) Paid In Capital in Excess of Par - Common Stock $ 183,600.00 b Cash (2800x$31) $ 86,800.00 || $ 2,800.00 Common Stock (2800 x $1) Paid In Capital in Excess of Par - Common Stock $ 84,000.00 Total Assets $ 277,200.00 Total Liabilities Total Stockholders' Equity $ 277,200.00

Answer to Requirement 2: Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. $ 190,400.00 Cash Common Stock Paid In Capital in Excess of Par - Common Stock (To record issue of common stock) 6,800.00 183,600.00 $ 86,800.00 Cash Common Stock Paid In Capital in Excess of Par - Common Stock (To record issue of common stock) 2,800.00 84,000.00