Answer:
Find the requirement below:
1. Prepare the journal entries required to record the sale of common stock in (a) and (b). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Prepare the stockholders’ equity section as it should be reported on the year-end balance sheet. (Amounts to be deducted should be indicated by a minus sign.)
First issue of shares:
Dr Cash $197,200
Cr Common stock $98,600
Cr Paid-in capital in excess of par $98,600
Second issue of shares:
Dr Cash $85,800
Cr Common stock $37,400
Cr Paid-in capital in excess of par $48,400
Shareholders equity section:
Common stock ($98,600+$37,400) $136,000
Paid in capital ($98,600+$48,400) $147,000
Retained earnings $7,300
Total shareholders' equity $290,300
Explanation:
First issue of shares:
cash proceeds 5,800*$34=$197,200.00
split into common stock $17*5,800=$98,600.00
paid-in capital in excess of par ($197,200-$98,600)= $98,600.00
second issue of shares:
cash proceeds 2,200*$39=$ 85,800.00
split into common stock $17*2200=$ 37,400.00
paid-in capital in excess of par ($85,800-$37,400)= $48,400.00
