Question

P11-1A DeLong Corporation was organized on January 1, 2019. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year. 

Jan. 10 Issued 80,000 shares of common stock for cash at $4 per share. 

Mar. 1 Issued 5,000 shares of preferred stock for cash at $105 per share. 

Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000. The fair value of the land was $85,000. 

May. 1 Issued 80,000 shares of common stock for cash at $4.50 per share. 

Aug 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $30,000 for services performed in helping the company organize. 

Sept 1 Issued 10,000 shares of common stock for cash at $5 per share. 

Nov. 1 Issued 1,000 shares of preferred stock for cash at $109 per share.. 

Instructions 

(a) Journalize the transactions. 

(b) Post to the stockholders' equity accounts. (Use T-accounts.) 

(c) Prepare the paid-in capital section of stockholders' equity at December 31, 2019.

 (c) Total paid-in capital $1,479,000 

Journalize and post treasury stock transactions, and prepare stockholders' equity section. 

Answer 1

DeLong Corporation
Journal entries
Date	Account	Debit	Credit	Calculation
10-Jan	Cash	$ 320,000		=80,000*4
	Common Stock		$   160,000	=80,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$   160,000
1-Mar	Cash	$ 525,000		=5,000*105
	Preferred Stock		$   500,000	=5,000*100
	Paid in Capital in Excess of Par-Preferred Stock		$     25,000
1-Apr	Land	$    85,000
	Common Stock		$     48,000	=24,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$     37,000
1-May	Cash	$ 360,000		=80,000*4.5
	Common Stock		$   160,000	=80,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$   200,000
1-Aug	Organization expenses	$    30,000
	Common Stock		$     20,000	=10,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$     10,000
1-Sep	Cash	$    50,000		=10,000*5
	Common Stock		$     20,000	=10,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$     30,000
1-Nov	Cash	$ 109,000		=1,000*109
	Preferred Stock		$   100,000	=1,000*100
	Paid in Capital in Excess of Par-Preferred Stock		$        9,000

DeLong Corporation
Balance Sheet Partial
As of December 31, 2019
Stockholders Equity
Capital Stock
Preferred Stock	600,000
Common Stock	408,000
Total Capital Stock		1,008,000
Additional Paid in capital
Paid in Capital in Excess of Par-Preferred Stock	34,000
Paid in Capital in Excess of Stated Value-Common Stock	437,000
Total Additional Paid in Capital		471,000
Total Stockholders Equity		1,479,000

Answer 2

DeLong Corporation
Journal entries
Date	Account	Debit	Credit	Calculation
10-Jan	Cash	$ 320,000		=80,000*4
	Common Stock		$   160,000	=80,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$   160,000
1-Mar	Cash	$ 525,000		=5,000*105
	Preferred Stock		$   500,000	=5,000*100
	Paid in Capital in Excess of Par-Preferred Stock		$     25,000
1-Apr	Land	$    85,000
	Common Stock		$     48,000	=24,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$     37,000
1-May	Cash	$ 360,000		=80,000*4.5
	Common Stock		$   160,000	=80,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$   200,000
1-Aug	Organization expenses	$    30,000
	Common Stock		$     20,000	=10,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$     10,000
1-Sep	Cash	$    50,000		=10,000*5
	Common Stock		$     20,000	=10,000*2
	Paid in Capital in Excess of Stated Value-Common Stock		$     30,000
1-Nov	Cash	$ 109,000		=1,000*109
	Preferred Stock		$   100,000	=1,000*100
	Paid in Capital in Excess of Par-Preferred Stock		$        9,000

Date DeLong Corporation T Accounts Date Debit Date Credit Preferred Stock 1-Mar $ 500,000 1-Nov $ 100,000 Debit Date Credit Common Stock 10-Jan $ 160,000 1-Apr $ 48,000 1-May $ 160,000 1-Aug $ 20,000 1-Sep $ 20,000 Bal. Bal. $ 600,000 Paid in Capital in Excess of Par-Preferred St 1-Mar $ 25,000 1-Nov $ 9,000 $ 408,000 Paid in Capital in Excess of Stated Value-Comm 10-Jan $ 160,000 1-Apr $ 37,000 1-May $ 200,000 1-Aug $ 10,000 1-Sep $ 30,000 Bal $ 34,000 $ 437,000

DeLong Corporation
Balance Sheet Partial
As of December 31, 2019
Stockholders Equity
Capital Stock
Preferred Stock	600,000
Common Stock	408,000
Total Capital Stock		1,008,000
Additional Paid in capital
Paid in Capital in Excess of Par-Preferred Stock	34,000
Paid in Capital in Excess of Stated Value-Common Stock	437,000
Total Additional Paid in Capital		471,000
Total Stockholders Equity		1,479,000