Question

Question 11 Novak Corporation was organized on January 1, 2020. It is authorized to Issue 13,000 shares of 89, $100 par value preferred stock, and 526,000 shares of no-par common stock with a stated value of $3 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 84,500 shares of common stock for cash at $6 per share. Mar. 1 Issued 5,150 shares of preferred stock for cash at $105 per share. Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $91,000. The fair value of the land was $80,500. May 1 Issued 83,500 shares of common stock for cash at $4.75 per share. Aug. 1 Issued 11,000 shares of common stock to attorneys in payment of their bill of $38,500 for services performed in helping the company organize. Sept. 1 Issued 12,000 shares of common stock for cash at $7 per share. Nov. 1 Issued 2,000 shares of preferred stock for cash at $109 per share. Journalize the transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Credit

Answer 1

Novak Corporation Journal Enteries Date Particulars Jan-10 Cash a/c Dr. To Common Stock ( 6-3) x 84500 To Paid in Capital in excess of par - CS Preferred Stock Cash Cash 715000 715000 Debit in $ Credit in $ 507000 253500 253500 515000 200000 Bal 715000 772500 Mar-01 Cash a/c Dr. To Preferred Stock To Paid in Capital in excess of par-PS 5150 X 105 = 772500; 5150 X 100 = 515000 515000 257500 Common Stock Cash Land Cash Organization Expense Cash 645000 645000 253500 72000 250500 33000 36000 80500 Apr-01 Land a/c Dr. To Common Stock ( 6-3) x 24000 To Paid in Capital in excess of par - CS Bal 72000 8500 645000 Dr. 396625 May-01 Cash a/c To Common Stock ( 6-3) x 83500 To Paid in Capital in excess of par - PS 83500 X 4.75 = 396625; 83500 X 3 = 250500 250500 146125 Paid in Capital in excess of par - CS Cash Land Cash Organization Expense 461625 Cash 461625 253500 8500 146125 5500 48000 461625 38500 Aug-01 Organization Expense a/c Dr. To Common Stock ( 6-3) x 11000 To Paid in Capital in excess of par - CS 33000 5500 84000 Sep-01 Cash a/c Dr. To Common Stock ( 6-3) x 84500 To Paid in Capital in excess of par-CS 12000 X 75 = 84000; 12000 X 3 = 36000 257500 18000 Paid in Capital in excess of par - PS Cash Cash 275500 275500 36000 48000 275500 218000 Nov-01 Cash a/c Dr. To Preferred Stock To Paid in Capital in excess of par - PS 2000 X 109 = 218000; 2000 X 100 = 200000 200000 18000

715000 645000 Stockholders Equity Section For the period ending 31.12.2020 8% Preferred Stock Authorized 13000 shares @$100 par, 7150 shares issued and Outstanding Common Stock Authorized 526000 shares no par, 287500 shares issued and Outstanding Total Capital Stock Paid in Capital in excess of par - PS Paid in Capital in excess of par - CS Total Stockholders Equity 1360000 275500 461625 737125