EX 13-7 Issuing stock

Wildwood Nursery, with an authorization of 50,000 shares of preferred stock and 400,000 shares of common stock, completed several transactions involving its stock on June 1, the first day of operations. The trial balance at the close of the day follows:


Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,584,000
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910,000
Preferred 3% Stock, $120 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200,000
Paid-In Capital in Excess of Par—Preferred Stock . . . . . . . . . . . . . . . . . . . 60,000
Common Stock, $50 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000
Paid-In Capital in Excess of Par—Common Stock . . . . . . . . . . . . . . . . . . . 84,000
2,844,000 2,844,000

All shares within each class of stock were sold at the same price. The preferred stock was issued in exchange for the land and buildings.

Journalize the two entries to record the transactions summarized in the trial balance.


Answer:

Buildings............................................................................... 910,000
Land....................................................................................... 350,000
 Preferred Stock ............................................................... 1,200,000
 Paid-In Capital in Excess of Par—Preferred Stock ...... 60,000
Cash ...................................................................................... 1,584,000
 Common Stock................................................................ 1,500,000
 Paid-In Capital in Excess of Par—Common Stock....... 84,000 

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