Question

eBook Show Me How Calculator E Print Item Entries for Issuing No-Par Stock On May 15, Helena Carpet Inc., a carpet Wholesaler, issued for cash 275,000 shares of no-par common stock (with a stated value of $4) at $12, and on June 30, it issued for cash 25,000 shares of preferred stock, $75 par at $79. a. Journalize the entries for May 15 and June 30, assuming that the common stock is to be credited with the stated value. If an amount box does not require an entry, leave it blank. May 15 June 30 b. What is the total amount invested (total paid-in capital) by all stockholders as of June 30?

Answer 1

a. Journal entries:

Date	Account	Debit	Credit
May-15	Cash (275,000 * $12)	$3,300,000
	Common Stock (275,000 * $4)		$1,100,000
	Paid in capital in excess of par value ($3,300,000 - $1,100,000)		$2,200,000
	To record issuance of 275,000 shares in excess of par value
May-30	Cash (25,000 * $79)	$1,975,000
	Preferred Stock (25,000 * $75)		$1,875,000
	Paid in capital in excess of par value ($1,975,000 - $1,875,000)		$100,000
	To record issuance of 25,000 preferred stock in excess of par value

b. Amount invested = $3,300,000 (cash received for common stock) + $1,975,000 (cash received for common stock)

= $5,275,000