Question

ACCT 1020 D2L Problem 1 A corporation was organized on January 1 of the current year, with an authorization of 20,000 shares of 4%, $12 par preferred stock, and 100,000 shares of S3 par common stock. The following selected transactions were completed during the first year of operations: Jan. 3 Issued 15,000 shares of common stock at $23 per share for cash. 31 Issued 200 shares of common stock to an attorney in payment of legal fees for organizing the Feb. 24 corporation. The value of the stock at the time of payment was $25 per share. Issued 20,000 shares of common stock in exchange for land, buildings, and equipment with fa prices of $65,000, $120,000, and $45,000, respectively. Issued 2,000 shares of preferred stock at $56 for cash. Mar. 15 Journalize the transactions

Answer 1

Date   Account title & Explanation    Debit Credit

Jan 1 Cash $540000

4% Preferred stock $240000

Common stock $300000

(To record issuance of stock)

Jan 3 Cash $345000

Common stock $45000

Additional capital in excess of par $300000

(To record issuance of stock at premium)

Jan 31 Legal fees $5000

Common Stock $600

Additional capital in excess of par $4400

(To record issuance of stock in lieu of legal fees)

Feb 24 Land $65000

Building $120000

Equipment $45000

Common Stock $60000

Additional capital in excess of par $170000*

(To record issuance of stock in exchange of assets)

Mar 15 Cash $112000

Preferred stock $24000

Additional capital in excess of par $88000

(To record issuance of preferred stock)

*$230000/20000=$11.5 per share