Answer:
23rd May
Dr Cash 960,000
Cr Common stock 240,000
Cr Paid-in Capital - Common Stock 720,000
( to record the issuance of 80,000 common shares for cash)
6th July
Dr Cash 900,000
Cr Preferred stock 900,000
( to record the issuance of 18,000 preferred shares for cash)
15th September
Dr Cash 750,000
Cr Common stock 150,000
Cr Paid-in capital - Common Stock 600,000
( to record the issuance of 50,000 common shares for cash)
Explanation:
Working notes for each transactions:
* 23rd May:
Cash increases by: Amount of stocks issued * Price at issuance = 80,000 * 12 = $960,000
Common stock account increases by: Amount of stock issued * Stated value = 80,000 * 3 = 240,000
Paid-in capital account increased by: Amount of stock issued * ( Price at issuance - Stated value) = 80,000 * 9 = $720,000
* 6th July:
Cash increases by: Amount of stocks issued * Price at issuance = 18,000 * 50 = $900,000
Preferred stock account increases by: Amount of stock issued * Par value = 18,000 * 50 = $900,000;
As shares are issued at par; no paid-in capital amount recorded.
* 15th September:
Cash increases by: Amount of stocks issued * Price at issuance = 50,000 * 15 = $750,000
Common stock account increases by: Amount of stock issued * Stated value = 50,000 * 3 = 150,000
Paid-in capital account increased by: Amount of stock issued * ( Price at issuance - Stated value) = 50,000 * 12 = $600,000.
