Question

On April 1, 9,000 shares of $7 par common stock were issued at $26, and on April 7, 5,000 shares of $70 par preferred stock were issued at $108. Required: Journalize the entries for April 1 and 7. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Answer:

Apr 1

DR Cash $234,000  

CR Common stock   $63,000

CR   Paid in capital in excess of par - Common Stock  $171,000

(To record issuance of common stock)

 

Apr 7

DR Cash $540,000  

CR Preferred stock   $350,000

CR Paid in capital in excess of par - Preferred Stock  $190,000

(To record issuance of preferred stock)

 

Explanation:

April 1

Cash

9,000 * 26 = $234,000

Common stock

9,000*7 = $63,000

April 7

Cash

5,000*108 = $540,000

Preferred stock

5,000*70 = $350,000