Answer:
Journal Entries Transaction
1.
Dr. Cash $120,000
Cr. Common stock $100,000
Cr. Paid-in capital excess of par, Common stock $20,000
2.
Dr. Company expenses $22,000
Cr. Common stock, $1 stated value $2,500
Cr. Paid-in-capital excess of stated value common stock $19,500
3.
Dr. Company expenses $22,000
Cr. Common stock, no-par value $22,000
4.
Dr. Cash $53,250
Cr. Preferred stock, $25 par value $31,250
Cr. Paid-in capital excess of par preferred stock $22,000
Explanation:
1. The Excess of common stock and cash received will be recorded in the Paid in capital in excess of par value, common Stock account.
Common Stock, $20 Par Value = 5,000 shares × $20 per share = $100,000
Paid in capital in excess of par value, common Stock = $120,000 – $100,000 = $20,000
2.The Excess of common stock and cash received will be recorded in the Paid in capital in excess of stated value, common Stock account.
Common stock = $1 x 2,500 = $2,500
Paid-in capital in excess of stated value, common stock = $22,000 - $2,500 = $19,500
4. The Excess of common stock and cash received will be recorded in the Paid in capital in excess of par value, common Stock account.
Preferred Stock, $25 Par Value = 1,250 shares × $25 per share = $31,250
Paid in capital in excess of par value, preferred Stock = $53,250 – $31,250 = $22,000
