Question

(Recording the Issuance of Common and Preferred Stock) Abernathy Corporation was organized on January 1, 2012. It is authorized to issue 10,000 shares of 8%, $50 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 80,000 shares of common stock for cash at $5 per share. Mar. 1 issued 5,000 shares of preferred stock for cash at $108 per share. Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000; the fale value of the land was $80,000. May 1 Issued 80,000 shares of common stock for cash at $7 per share. Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $50,000 for services rendered in helping the company organize. Sept. 1 Issued 10,000 shares of common stock for cash at $9 per share. Nov. 1 Issued 1,000 shares of preferred stock for cash at $112 per share. Instructions Prepare the journal entries to record the above transactions.

Answer 1

Date	General Journal	Debit	Credit
Jan 10	Cash (80,000 * $5)	$400000
	Common Stock (80,000 * $2)		$160000
	Paid in Capital in Excess of Stated Value-Common Stock (80,000 * $3)		$240000
Mar 1	Cash (5,000 * $108)	$540000
	Preferred Stock (5,000 * $50)		$250000
	Paid in Capital in Excess of Stated Value- Preferred Stock (5,000 * $58)		$290000
Apr 1	Land	$80000
	Common Stock (24,000 * $2)		$48000
	Paid in Capital in Excess of Stated Value- Common Stock ( $80,000 - $48,000)		$32000
May 1	Cash (80,000 * $7)	$560000
	Common Stock (80,000 * $2)		$160000
	Paid in Capital in Excess of Stated Value-Common Stock (80,000 * $5)		$400000
Aug 1	Organization Expense	$50000
	Common Stock (10000 * $2)		$20000
	Paid in Capital in Excess of Stated Value-Common Stock ($50,000 - $20,000)		$30000
Sept 1	Cash (10,000 * $9)	$90000
	Common Stock (10,000 * $2)		$20000
	Paid in Capital in Excess of Stated Value-Common Stock (10000 * $7)		$70000
Nov 1	Cash (1,000 * $112)	$112000
	Preferred Stock (1,000* $50)		$50000
	Paid in Capital in Excess of Stated Value- Preferred Stock (1,000 * $62)		$62000