Question

Entries for Issuing Stock On January 22, Zentric Corporation issued for cash 160,000 shares of no-par common stock at $8. On February 14, Zentric issued at par value 45,000 shares of preferred 2% stock, $50 par for cash. On August 30, Zentric issued for cash 10,000 shares of preferred 2% stock, $50 par at $56. Journalize the entries to record the January 22, February 14, and August 30 transactions. If an amount box does not require an entry, leave it blank. Jan. 22 Feb. 14 Aug. 30

Answer 1

Answer:

Zentric Corporation

Journal Entries:

Jan. 22:

Debit Cash Account $1,328,000

Credit Common Stock $1,328,000

To record the issue of 160,000 shares of no-par common stock at $8.

Feb. 14:

Debit Cash Account $2,250,000

Credit Preferred 2% Stock $2,250,000

To record the issue of 45,000 preferred 2% stock at $50 par.

Aug. 30:

Debit Cash Account $560,000

Credit Preferred 2% Stock $500,000

Credit Additional Paid-in Capital-Preferred Stock $60,000

To record the issue of 10,000 shares of preferred 2% stock, $50 par at $56.

Explanation:

Journal entries record business transactions of Zentric Corporation initially.  Before recording any transaction, the Zentric accountant must identify the accounts involved.  There are usually two or more accounts involved in each transaction.  The account to be debited and the account to be credited, depending on the giver and receiver of value are identified and accordingly recorded.  Journal entries also come with short narrations, which explain the transaction.