Question

Homework: Chapter 14 Calculator Print liem Wingra Corporation was organized in March. It is authorized to issue 600,000 shares of $100 par value 8% preferred stock. It is also authorized to issue 750,000 shares of s1 par value common stock. In its first year, the corporation has the following transactions: Mar. 1 Issued 10,000 shares of preferred stock at $115 per share. Mar. 2 Issued 140,000 shares of common stock at S13 per share. Apr. 10 Issued 15,000 shares of common stock for equipment valued at $198,000. The stock currently trading at $12 per share, and is a more reliable indicator of the value of the equipment Jun. 12 Issued 12,000 shares of common stock at $15 per share. Aug. 5 Issued 1,000 shares of preferred stock at 5112 per share Prepare the journal entries to record the transactions. If an amount box does not require an entry, leave it blank. Mar. 1 Cash Preferred Stock Additional Paid-in Capital from Preferred Stock Mar. 2 Cash Common Stock III III III III III III Additional Pald-in Capital from Common Stock Apr. 10 Equipment Common Stock Additional Paid-in Capital from Common Stock

Answer 1

Wingra corporation

Journal Entries for the month of March

Date	Particulars	Dr	Cr
01-03	Cash	1150000
	Preffered Stock		1000000
	Additional Paid up capital from Prefered Stock		150000
	(issued 10000 shares of Prefered stock @115,par value is 100 )
Date	Particulars	Dr	Cr
02-03	Cash	1820000
	Common Stock		140000
	Additional Paid up capital from Common Stock		1680000
	(issued 140000 shares of Common stock @ 13 ,par value is 1 )
Date	Particulars	Dr	Cr
10-03	Equipment	198000
	Common Stock		15000
	Additional Paid up capital from Common Stock		183000
	(issued 15000 shares of Common stock for equipment valued @ 198000)
	(par value is 1) ( See Note 1.)
Date	Particulars	Dr	Cr
12-06	Cash	180000
	Common Stock		12000
	Additional Paid up capital from Common Stock		168000
	(issued 12000 shares of Common stock @ 15,par value is 1)
05-08	Cash	112000
	Preffered Stock		100000
	Additional Paid up capital from Prefered Stock		12000
	(issued 1000 shares of Prefered stock @112,par value is 100 )

Notes:1

Additional paid-in capital (APIC), is an accounting term referring to money an investor pays above and beyond the par value price of a stock. Often referred to as "contributed capital in excess of par”, APIC occurs when an investor buys newly-issued shares, directly from a company, during its initial public offering (IPO) stage. Therefore, APICs, which are itemized under the “shareholder’s equity” section of a balance sheet, are viewed as profit opportunities for companies, who receive excess cash from stockholders.

Notes:2

Difference Between Preferred Stock and Common Stock

1. Both common stock and preferred stock represent the ownership interest in a firm,and are entitled to dividends and capital gains and can be traded on a stock exchange .

2. Preferred stock is paid a fixed dividend on a periodic basis, whereas common stockholder’s income will depend on the company’s performance.

3. Preferred stock holders are paid dividends first before any dividends payments are made to common stockholders