Question

Question One Max Corp. was organised on January 1, 2012. It is authorised to issue 250,000 shares of 8 5110 par value preference shares, and 900.000 shares of ordinary shares with a par value of 4 per share. Journalize the following share transactions that were completed during the first year Transaction Issued 50,000 ordinary shapes for cash ar 57 per share Date Feb. 1 Journal Entry Mar 2 Issued 14,000 ordinary shares to lawyer in payment of their fees of $70,000 for services rendered in helping the company organize Journal Entry April 15 Issued 30,000 ordinary shares for cashear ss per share. Journal Entry June 16 Issued 25.000 preference shares for cash ar $130 per share Journal Entry June 20 Issued 25,000 ordinary shares for Equipment. The asking price of the equipment was $130,000; the fair value of the equipment was $95,000. Joumal Entry ACT 420. Intermediate Accounting II - Summer II 2020

Answer 1

Answer:

Date	Journal Entries
Feb-1	Dr. Cash $ 350000 Cr. Common Stock $ 200000 Cr. Paid in capital, Common $ 150000
Mar-2	Dr. Organization Expense $ 70000 Cr. Common Stock $ 56000 Cr. Paid in Capital, Common $ 14000
Apr-15	Dr. Cash $ 150000 Cr. Common Stock $ 120000 Cr. Paid in Capital, Common $ 30000
Jun-16	Dr. Cash $ 3250000 Cr. Preferre Stock $ 2750000 Cr. Paid in Capital, Preferred $ 500000
Jun-20	Dr. Land $ 95000 Dr. Paid in Capital $ 5000 Cr. Common Stock $ 100000

Note:

Paid in Capital = issue price - par value

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