Question

Whispering Corporation is authorized to issue 45,000 shares of $5 par value common stock. During 2020, Whispering took part in the following selected transactions.

1.		Issued 4,500 shares of stock at $48 per share, less costs related to the issuance of the stock totaling $6,300.
2.		Issued 1,100 shares of stock for land appraised at $45,000. The stock was actively traded on a national stock exchange at approximately $49 per share on the date of issuance.
3.		Purchased 530 shares of treasury stock at $46 per share. The treasury shares purchased were issued in 2016 at $43 per share.

(a)		Prepare the journal entry to record item 1.
(b)		Prepare the journal entry to record item 2.
(c)		Prepare the journal entry to record item 3 using the cost method.

(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 0 for the amounts.)

No.	Account Titles and Explanation	Debit	Credit
(a)	enter an account title to record the first item	enter a debit amount	enter a credit amount
	enter an account title to record the first item	enter a debit amount	enter a credit amount
	enter an account title to record the first item	enter a debit amount	enter a credit amount
(b)	enter an account title to record the second item	enter a debit amount	enter a credit amount
	enter an account title to record the second item	enter a debit amount	enter a credit amount
	enter an account title to record the second item	enter a debit amount	enter a credit amount
(c)	enter an account title to record the third item using the cost method	enter a debit amount	enter a credit amount
	enter an account title to record the third item using the cost method	enter a debit amount	enter a credit amount

Answer 1

No Account Telles and Explanations. Debit |[ 209 700 Credit (a) Cash Common S-lock Paid-in capital on $ 22500 $ 187200 - Excess of pare- Common (b) $ 53900 - Thand Common slock Paid-in capital in reces of pare- common stock Treasury stock 5500 $ 48400 (c) $ 24380 cash $ 24380 Explanallons : (a) Cash : [(1500X $ 48 pershane) – $6300 ofrece code] . : +($ 216000 – $ 6300) = $ 209700 Common slock ( 4500 shares X 85 parveke pocelow) = $ 22500 Pard - in capolal en excesof per- commonshek .5 ($ 209700 – $22500). ...s $ 187200

(1) kand: (1400 shanes x8&a pershave) = 953900 Common stock : (4400 sharesX 8.5 parvelue). $5500 . . Paid-in capital in excess of par-common stock co [1100 X (8 49-95)] = 74100 X $44) - 9 48400 Note: The faire value of the stock ($53900 ).is used to value theexchange Because it is a more objective measure then the appraised valeve of the land ($45.000) EC) Treasing slock : ( 580 shaneš. X 9 46 pershare) is 24380