Answer:
a) May 10th Debit Cash $21,000 Credit Common Stock 3,000 and Paid in Excess capital $18,000
b) May 15th Debit Cash $116,000 Credit Preferred stock $30,000 and Paid in Excess Preferred Stock $86,000
Explanation:
The question is to show the journal entries of the company on May 10th and May 15 respectively
a) what was the cash received on May 10 = 1,500 shares x $14= $21,000
What is the Value of the stock = 1,500 shares x $2 = 3,000
Paid in excess then = 21,000- 3,000 = $18,000
Journal Entry For May 10
Date Description Debit ($) Credit 9$)
10th May Cash 21,000
Common stock 3,000
Excess paid in capital 18,000
Being the issue of no-par common stock
b) What was the cash received on May 15th = 2,000 shares x $58 = $116,000
What is the value of the preferred stock = 2,000 shares x 15 = $30,000
Paid in excess preferred stock = $116,000- $30,000 = $86,000
Journal Entry For May 15
Date Description Debit ($) Credit 9$)
15th May Cash 116,000
Preferred stock 30,000
Excess paid in capital 86,000
Being the record of the issue of preferred stock
