Question

Presented below is information related to Stellar Company:

1. The company is granted a charter that authorizes issuance of 15,000 shares of $100 par value preferred stock and 40,000 shares of no-par common stock. 2. 8,000 shares of common stock are issued to the founders of the corporation for land valued by the board of directors at $280,000. The board establishes a stated value of $10 a share for the common stock. 3. 5,600 shares of preferred stock are sold for cash at $110 per share. 4. The company issues 150 shares of common stock to its attorneys for costs associated with starting the company. At that time, the common stock was selling at $65 per share. Prepare the general journal entries necessary to record these transactions. (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 o for the amounts.) No. Account Titles and Explanation Debit Credit (a) (b) (c) (d)

Answer 1

Answer
No	Account Titles and Explanation	Debit	Credit
1	No Entry	$           -
			$           -
2	Land	$2,80,000
	Common Stock (8000*10)		$   80,000
	Paid in capital in excess of Stated Value- Common stock		$2,00,000
	(To record issue of common stock against Land)
3	Cash (5600*110)	$6,16,000
	Preferred Stock (5600*100)		$5,60,000
	Paid in capital in excess of par - Preferred stock		$   56,000
	(To record issue of preferred stock against cash)
4	Organisation Expense (150*65)	$     9,750
	Common Stock (150*10)		$     1,500
	Paid in capital in excess of stated value - Common stock		$     8,250
	(To record issue of common stock)