Question

Exercise 15-02

Mountain Corporation was organized on January 1, 2020. It is authorized to issue 9,500 shares of 8%, $100 par value preferred stock, and 523,200 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year.

Jan. 10		Issued 80,270 shares of common stock for cash at $7 per share.
Mar. 1		Issued 5,750 shares of preferred stock for cash at $111 per share.
Apr. 1		Issued 24,580 shares of common stock for land. The asking price of the land was $91,860; the fair value of the land was $80,270.
May 1		Issued 80,270 shares of common stock for cash at $9 per share.
Aug. 1		Issued 9,500 shares of common stock to attorneys in payment of their bill of $51,700 for services rendered in helping the company organize.
Sept. 1		Issued 9,500 shares of common stock for cash at $11 per share.
Nov. 1		Issued 920 shares of preferred stock for cash at $106 per share.

Prepare the journal entries to record the above 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 0 for the amounts.)

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Jan. 10	Cash	561890		=80270*7
	Common stock		80270
	Paid-in Capital in Excess of Stated Value-Common Stock		481620
Mar. 1	Cash	638250		=5750*111
	Preferred stock		575000	=5750*100
	Paid-in Capital in Excess of Par value-Preferred Stock		63250
Apr. 1	Land	80270
	Common stock		24580
	Paid-in Capital in Excess of Stated Value-Common Stock		55690
May 1	Cash	722430		=80270*9
	Common stock		80270
	Paid-in Capital in Excess of Stated Value-Common Stock		642160
Aug. 1	Organization expense	51700
	Common stock		9500
	Paid-in Capital in Excess of Stated Value-Common Stock		42200
Sept. 1	Cash	104500		=9500*11
	Common stock		9500
	Paid-in Capital in Excess of Stated Value-Common Stock		95000
Nov. 1	Cash	97520		=920*106
	Preferred stock		92000	=920*100
	Paid-in Capital in Excess of Par value-Preferred Stock		5520