Question

A)

Stockholders' Equity Transactions and Balance Sheet Presentation Tunic Corporation was organized on April 1, with an authorization of 25,000 shares of six percent. $50 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 80,000 shares of common stock at $15 cash per share 3 Issued 2,000 shares of common stock to attorneys and promoters 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 fair market value of $48,000 20 Issued 6,000 shares of preferred stock for cash at $55 per share. Required a. Prepare journal entries to record the above transactions General Journal Date Description Apr 01 Debit Credit Paid in Capital in Excess of Par Value - Common Stock Issued shares of common stock Apr 03 Common Stock swed common stock for organization costs Apr 08 Common Stock Issued common stock for equipment Apr 20 Preferred Stock Issued shares of preferred stock

B)

Answer 1

General Journal
Date	Description	Debit	Credit
Apr.01	Cash (80,000 ×$15)	$1,200,000
	Common stock (80,000 ×$5)		$400,000
	Paid-in-capital in excess of par value- common stock		$800,000
	(Issued shares of common stock)
Apr.03	Organization cost	$31,000
	Common stock (2,000 ×$5)		$10,000
	Paid-in-capital in excess of par value- common stock		$21,000
	(Issued common stock for organizations costs)
Apr.08	Equipment	$48,000
	Common stock (3000 × 5)		$15,000
	Paid-in-capital in excess of par value- common stock		$33,000
	(Issued common stock for Equipment)
Apr.20	Cash (6000 ×$55)	$330,000
	Preferred stock (6000 × $50)		$300,000
	Paid-in-capital in excess of par value- preferred stock		$30,000
	(Issued shares of preferred stock)

B)

Stockholders' Equity
Paid in capital
Preferred stock	$300,000
Common stock ($400,000 + $10,000 +$15,000)	$425,000	$725,000
Additional paid-in-capital
Paid-in-capital in excess of par value- preferred stock	$30,000
Paid-in-capital in excess of par value- common stock ($800,000 +$21,000 + $33,000)	$854,000	$884,000
Total paid in capital		$1,609,000
Retained earnings		$49,000
Total stockholders equity		$1,658,000