Question

Stockholders' Equity: Transactions and Balance Sheet Presentation Tunic Corporation was organized on April 1, with an authorization of 25,000 shares of six percent, sS50 par value preferred stock and 200,000 shares of $5 par value common stock. During April, the following transactions affecting stockholders equity occurred: Apr. 1 Issued B0,000 shares of common stack at 320 cash per share. 3Issued 2,000 shares of common stock to attorneys and promaters in exchange for their services in organizing the corporation. The services were valued at $31,000 8 Issued 3,000 shares of common stock in exchange for equipment with a lair market value of $55,000. 20 Issued 6,000 shares of preferred stock for cash at $60 per share Required a. Prepare journal entries to record the above transactions. General Journal Date Description Debit Credit Apr.01 Paid-in-Capital in Excess of Par Value Common Stock Issued shares of common stack Apr.03 Common Stock Issued common stock for organization costs Apr.08 Common Stock Issued common stock for equipment. Apr.20 Preferred Stock Issued shares of preferred stock

Answer 1

Journal entries :

Date	account and explanation	debit	credit
Apr 1	Cash (80000*20)	1600000
	Common Stock (80000*5)		400000
	Paid in capital in excess of par value-Common Stock		1200000
	(To record issue common Stock)
Apr 3	Organisation fees	31000
	Common Stock (2000*5)		10000
	Paid in capital in excess of par value-Common Stock		21000
	(To record common Stock)
Apr 8	Equipment	55000
	Common Stock (3000*5)		15000
	Paid in capital in excess of par value-Common Stock		40000
	(To record common Stock)
Apr 20	Cash (6000*60)	360000
	Preferred stock (6000*50)		300000
	Paid in capital in excess of par value-Preferred Stock		60000
	(To record preferred stock)

Stockholder's equity

Paid in capital
Common Stock (80000*5)	425000
Preferred stock	300000	725000
Additional paid in capital
Paid in capital in excess of par value-Common Stock	1261000
Paid in capital in excess of par value-Preferred Stock	60000	1321000
Total Paid in capital		2046000
Retained earnings		51000
Total Stockholder's equity		2097000