Question

P13-1A DeLong Corporation was organized on January 1, 2017. It is authorized to issue 10,000 shares of 8%, $100 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 $4 per share. Mar 1 Issued 5,000 shares of preferred stock for cash at $105 per share. Apr Issued 24,000 shares of common stock for land. The asking price of the land was $90,000. The fair value of the land was $85,000. May 1 Issued 80,000 shares of common stock for cash at $4.50 per share. Aug. Issued 10,000 shares of common stock to attorneys in payment of their bill of $30,000 for services performed in helping the company organize. Sept. Issued 10,000 shares of common stock for cash at $5 per share. Nov. 1 Issued 1,000 shares of preferred stock for cash at $109 per share Instructions (a) Journalize the transactions. (b) Post to the stockholders' equity accounts. (Use J5 as the posting reference.) (c) Prepare the paid-in capital section of stockholders' equity at December 31, 2017

Answer 1

PART-1)

Date	Particulars	Debt	Credit
Jan-10	Cash (80,000　* 4)	320,000
	Common stock [80,000　* ($4-$2)]		160,000
	Paid-in Capital in Excess of Stated Value-Common Stock (80,000　* 2)		160,000
Mar-01	Cash (5,000 * $105)	525000
	Preferred stock (5,000 * $100)		500,000
	Paid-in Capital in Excess of Par-Preferred Stock (5,000 * $5)		25,000
Apr-01	Land	85,000
	Common stock (24,000 * 2)		48,000
	Paid-in Capital in Excess of Stated Value-Common Stock		37,000
May-01	Cash (80,000 * 4.5)	360,000
	Common stock (80,000 * 2)		160,000
	Paid-in Capital in Excess of Stated Value-Common Stock		200,000
Aug-01	Organization Expense	30,000
	Common stock (10,000 * 2)		20,000
	Paid-in Capital in Excess of Stated Value-Common Stock		10,000
Sep-01	Cash (10,000 * 5)	50,000
	Common stock (10,000 * 2)		20,000
	Paid-in Capital in Excess of Stated Value-Common Stock (10,000 * 3)		30,000
Nov-01	Cash (1,000 * 109)	109,000
	Preferred Stock (1,000 * 100)		100,000
	Paid-in Capital in Excess of Par-Preferred Stock (1,000 * 9)		9,000

　

Part-2)

	Preferred Stock
Date	Debt	Credit	Balance
Mar-01		500,000	500,000
Nov-01		100,000	600,000
	Common Stock
Date	Debt	Credit	Balance
Apr-01		160,000	160,000
Apr-00		48,000	208,000
May-01		160,000	368,000
Aug-01		20,000	388,000
Sep-01		20,000	408,000
	Paid-in Capital in Excess of Par-Preferred Stock
Date	Debt	Credit	Balance
Mar-01		25,000	25,000
Nov-01		9,000	34,000
	Paid-in Capital in Excess of Stated Value-Common Stock
Date	Debt	Credit	Balance
Jan-10		160,000	160,000
Apr-01		37,000	197,000
May-01		200,000	397,000
Aug-01		10,000	407,000
Sep-01		30,000	437,000

　

Part-3)

Stockholders’ equity
Paid-in capital
Capital stock
Preferred Stock	600,000
Common Stock	408,000
Capital stock - Total		1,008,000
Additional Paid-in capital
Paid-in Capital in Excess of Stated Value-Common Stock	437,000
Paid-in Capital in Excess of Par-Preferred Stock	34,000
Additional Paid-in capital - Total		471,000
Paid-in Capital - Total		1,479,000