Question

Orley Company had the following transactions. 1. Issued 5,000 shares of common stock with a stated value of $10 for $130,000. Issued 2,000 shares of $100 par preferred stock at $108 for cash. 2. Prepare the journal entries to record the above stock transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 2.

Answer 1

No. Account Title and Explanation 1 Cash A/C Common stock A/C(5,000*10) Paid in capital in excess of stated value-common stock A/C (To record issue of 5,000 shares of common stock with a stated value of $10) Debit Credit $130,000 $50,000 $80,000 $216,000 2 Cash A/C(2,000* 108) Preferred stock A/C(2,000* 100) Paid in capital in excess of par-preferred stock A/C (To record issue of 2,000 shares of preferred stock for $108,par value $100) $200,000 $16,000