Question

The charter for KWCP-TV, Inc. authorizes the company to issue 100,000 shares of $6, no par preferred stock and 500,000 shares of common stock with S1 par value. During its startup phase, KWCP - TV completed the following transactions: (Click on the icon to view the transactions) Read the requirements Requirement 1. Record the transactions in the general journal (Record debits first, then credits. Select the explanation on the last line of the journal entry table) Sep. 6: Issued 225 shares of common stock to the promoters who organized the corporation, receiving cash of $6.750. Debit Credit Date Accounts and Explanation Sep. 6 Cash 6.750 Common Stock-$1 Par Value Paid-in Capital in Excess of Par-Common issued common stock for cash.

Answer 1

Answer-- JOURNAL ENTRIES

Date	Account Title and Explanation	Debit ($)	Credit ($)
Sep.6	Cash	6,750
	Common Stock (225 shares *$1 par value)		225
	Paid-in capital in excess of par value ($6,750-$225)		6,525
	(To issued common stock for cash)
Sep.12	Cash	29,000
	Preferred Stock		29,000
	(To issued preferred stock for cash)
Sep.14	Land	26,000
	Common stock (1,000 shares *$1)		1,000
	Paid-in capital in excess of par value ($26,000-$1,000)		25,000
	(To record acquisition of land)

2-Preparation of Stockholders' Equity

Particulars	Amount ($)
Paid in Capital
Preferred Stock	29,000
Common Stock (1,000+225)	1,225
Paid-in Capital in excess of par value ($25,000+$6,525)	31,525
Total Paid in Capital	61,750
Reserves	39,000
Total Shareholders' Equity	$100,750