Question

On October 31, Legacy Rocks Inc., a marble contractor, issued for cash 77,000 shares of $10 par common stock at $11, and on November 19, it issued for cash 17,040 shares of preferred stock, $50 par at $53. Required: A. Journalize the entries for October 31 and November 19. Refer to the Chart of Accounts for exact wording of account titles. B. What is the total amount invested (total paid-in capital) by all stockholders as of November 19?

Answer 1

Credit Debit $8,47,000 $7,70,000 $77,000 (A) Date Accounts and Explanation October 31 Cash (77,000 X $11) To Common stock (77,000 X $10) To Paid-In Capital in Excess of Par-Common Stock (77,000 X $1) (To record amount received from issue of common stock) November 19 Cash (17,040 X $53) To Preferred stock (17,040 X $50) To Paid-In Capital in Excess of Par-Preferred Stock (17,040 X $3) (To record amount received from issue of preferred stock) $9,03,120 $8,52,000 $51,120 (B) Total amount invested (total paid-in capital) by all stockholders as of November 19 Particulars Amount Common stock (77,000 X $10 $7,70,000 Preferred stock (17,040 X $50) $8,52,000 Total amount invested $16,22,000