Question

Blossom Corporation's charter authorized issuance of 99,000 shares of $10 par value common stock and 49,900 shares of $50 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent of the others. 1. Issued a $9,700, 10% bond payable at par and gave as a bonus one share of preferred stock, which at that time was selling for $113 a share. 2. Issued 510 shares of common stock for equipment. The equipment had been appraised at $7,500; the seller's book value was $5,600. The most recent market price of the common stock is $16 a share. 3. Issued 409 shares of common and 100 shares of preferred for a lump sum amounting to $11,900. The common had been selling at $14 and the preferred at $59. 4. Issued 200 shares of common and 48 shares of preferred for equipment. The common had a fair value of $16 per share; the equipment has a fair value of $6,000. Record the transactions listed above in journal entry form. (Round Round intermediate calculations to 6 decimal places, e.g. 0.546872 and final answers to O decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Answer 1

The journal entries are given as below:

No.	Account Titles and Explanation	Debit	Credit
1	Cash	$9,700
	Discount on Bonds Payable	$113
	Bonds Payable		$9,700
	Preferred Stock		$50
	Paid-in Capital in Excess of Par-Preferred Stock (113-50)		$63
2	Equipment (510*16)	$8,160
	Common Stock (510*10)		$5,100
	Paid-in Capital in Excess of Par-Common Stock [(510*(16-10)]		$3,060
3	Cash	$11,900
	Preferred Stock (100*50)		$5,000
	Paid-in Capital in Excess of Par-Preferred Stock [(100*59)/(409*14+100*59)*11,900-5,000]		$1,039
	Common Stock (409*10)		$4,090
	Paid-in Capital in Excess of Par-Common Stock [(409*14)/(409*14+100*59)*11,900-4,090]		$1,771
4	Equipment	$6,000
	Preferred Stock (48*50)		$2,400
	Paid-in Capital in Excess of Par-Preferred Stock [6,000-200*16-2,400]		$400
	Common Stock (200*10)		$2,000
	Paid-in Capital in Excess of Par-Common Stock [200*16-2,000]		$1,200