EX 13-4 Entries for issuing no-par stock

On July 12, Lasting Carpet Inc., a carpet wholesaler, issued for cash 300,000 shares of no-par common stock (with a stated value of $4) at $9, and on November 18, it issued for cash 40,000 shares of $90 par preferred stock at $100.

a. Journalize the entries for July 12 and November 18, assuming that the common stock is to be credited with the stated value.

b. What is the total amount invested (total paid-in capital) by all stockholders as of November 18?


Answer:

a. July 12 Cash .............................................................. 2,700,000
 Common Stock ....................................... 1,200,000
 Paid-In Capital in Excess of
 Stated Value....................................... 1,500,000
 Nov. 18 Cash .............................................................. 4,000,000
 Preferred Stock ....................................... 3,600,000
 Paid-In Capital in Excess of Par—
 Preferred Stock.................................. 400,000
b. $6,700,000 ($2,700,000 + $4,000,000) 

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