Question

Blue Spruce Corp. is authorized to issue both preferred and common stock. The par value of the preferred is $49. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock. Feb. 1 Issued 18,500 shares for cash at $59 per share. July 1 Issued 12,000 shares for cash at $63 per share. Journalize the transactions. (Record journal entries in the order presented in the problem. 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 for the amounts) Date Account Titles and Explanation Credit Post to the stockholders' equity accounts. (Post entries in the order of journal entries presented in the previous part.) Preferred Stock Date Explanation Ref. Debit Credit Balance

Answer 1

a) Journal entry

Date	account title and explanation	Debit	Credit
Feb 1	Cash (18500*59)	1091500
	Preferred stock (18500*49)		906500
	Paid in capital in excess of par value-Preferred stock		185000
July 1	Cash (12000*63)	756000
	Preferred stock (12000*49)		588000
	Paid in capital in excess of par value-Preferred stock		168000

b) T account

Preferred stock
Date	Explanation ref	Debit	Credit	Balance
Feb 1			906500	906500
July 1			588000	1494500
Paid in capital in excess of par value-Preferred stock
Date	Explanation ref	Debit	Credit	Balance
Feb 1			185000	185000
July 1			168000	353000