Question

Section E--Capital Stock Transactions Golden Rams Corporation is granted a ch $50 par value preferred stock ms Corporation is granted a charter that authorizes the issuance of 100,000 shares of value preferred stock and 300.000 shares of $10 par value common stock. repare the journal entry to record the following transactions. 1. Golden Rams issued 3.000 shares of common stock to its attorneys for costs associated with starting the corporation. At that time, the common stock was selling at $15 per share. 2. Golden Rams issued 10,000 shares of preferred stock are sold for cash at $60 per share. 3. Golden Rams acquired land and building by issuing 30,000 shares of common stock. The land was recently appraised at $100,000 and the building was appraised at $400,000.

Answer 1

Journal Entries:

Debit Credit

1. To record the receipt of setup services and issuance for capital stock:

Startup Cost (use selling price) $45,000

Common Stock (3000 shares x $10 par) $30,000

Paid-in capital in excess of par value - Common ($45,000 - $30,000) $15,000

2. To record the issue of preferred shares at more than par value:

Cash (using selling price) $6,00,000

Preferred Stock (10,000 shares x $50 par) $5,00,000

Paid-in capital in excess of par value - Preferred ($6,00,000- $5,00,000) $1,00,000

3. To record the issue of Common stock for Land & Building:

Land (appraised value)    $1,00,000

Building (appraised value) $4,00,000

Common Stock (30,000 shares x $10 par) $3,00,000

Paid-in capital in excess of par value - Common ($5,00,000 - $3,00,000) $2,00,000