Question

Stellar Corporation’s charter authorized issuance of 110,000 shares of $10 par value common stock and 48,500 shares of $50 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent of the others.

1.		Issued a $11,000, 9% bond payable at par and gave as a bonus one share of preferred stock, which at that time was selling for $98 a share.
2.		Issued 460 shares of common stock for equipment. The equipment had been appraised at $7,500; the seller’s book value was $6,200. The most recent market price of the common stock is $17 a share.
3.		Issued 378 shares of common and 97 shares of preferred for a lump sum amounting to $11,100. The common had been selling at $15 and the preferred at $62.
4.		Issued 220 shares of common and 51 shares of preferred for equipment. The common had a fair value of $17 per share; the equipment has a fair value of $6,900.
No.	Account Titles and Explanation	Debit	Credit
1.
2.
3.
4.

Answer 1

Answoro I. cash & paid in capital in excess of pas-prefened stock = Discound on bonds payolake - preferred stock. = $98-$50 - $48 d. Equipment = 460 X$17 = $ 780 common stock = 460 x 10 = 4600 paid in capital in Excess of par-common stock - 460 x C17-10) = 460 X 7 : = 3220 3. Common stock = 376X10 = 3780 paid in capitalin excess cipar-common stock [SEXISY(378 xiz) + (27X63)) x 1,100) - 3420- (15440) (1654)) x11,100) – 3720 = 1,607. Preferred stock = 97 x 50 : = 4850

Pried in capital in excess of pan- pocberred stock © = {(17 263)|(378 x 15 ) +(87 «sal) x ,60) – 4850* =fcoru)/(1684)) x 1,100)_4850 ={863. 4. Equipment common slock: 920X10 = 2200 Paid in Capi-tab in Elcem o para common stock = SDX(1710) = 2207 - 1540 Preferred stock = 51X 50 - 2550 paid in capital in excess o par - common stock = 6,900 – 2200 - 1540-2550 = $610

Debit credit $11,000 $98 Account Titles Ee Ezplanation cach Discount on hands payable. bonds pagable preferred stack paid -in. capital in Excesso par-poefenidstock Equipment $19000 $48. $7820 Common stock $4600 $3220 13. $11100 $31780 Pand-in capital in Eucens de par-common stock I cach .common.stock paid-in capital in Excel.d, par-common slock Preferred stock prid.in captefalm Execas.d part-pockenred stock Equipment $1,607 $4,850 $863 $6,900 Common stock $2200 Paid-in capital in Erces de per-cammina stock. preferred stock paidan capital_in_sz cry, d poor.-poefened stock. $1540 $2550 $610