Answer and Explanation:
The journal entries, posting and preparation of the paid-in capital section of stockholders’ equity is presented below:
a. The journal entries are shown below:
On Jan 10
Cash $302,000
To Common Stock $151,000 (75,500 shares × $2)
To Paid in Capital in Excess of Stated Value-Common Stock $151,000
(Being the issuance of the common stock is recorded)
On Mar 1
Cash $593,250 (5,650 shares × $105 )
To Preferred Stock $565,000 (5,650 shares × $100 )
To Paid in Capital in Excess of Par-Preferred Stock $28,250
(Being the issuance of the Preferred stock is recorded)
On Apr 1
Land $83,000
To Common Stock $50,000 (25,000 shares × $2)
To Paid in Capital in Excess of Stated Value-Common Stock $33,000
(Being the issuance of the common stock is recorded)
On May 1
Cash $359,125 (84,500 shares × $4.25)
To Common Stock $169,000 (84,500 shares × $2)
To Paid in Capital in Excess of Stated Value-Common Stock $190,125
(Being the issuance of the common stock is recorded)
On Aug 1
Organization expenses $41,000
To Common Stock $22,000 (11,000 shares × $2)
To Paid in Capital in Excess of Stated Value-Common Stock $19,000
(Being the issuance of the common stock is recorded)
On Sep 1
Cash $60,000 (10,000 shares × $6)
To Common Stock $20,000 (10,000 shares × $2)
To Paid in Capital in Excess of Stated Value-Common Stock $40,000
(Being the issuance of the common stock is recorded)
On Nov 1
Cash $277,500 (2,500 shares × $111)
To Preferred Stock $250,000 (2,500 shares × $100)
To Paid in Capital in Excess of Par-Preferred Stock $27,500
(Being the issuance of the common stock is recorded)
b. The T accounts of the above accounts are presented below:
Preferred Stock
Mar 1 $565,000
Nov 1 $250,000
Balance $815,000
Common Stock
Jan 10 $151,000
April 1 $50,000
May 1 $169,000
Aug 1 $22,000
Sep 1 $20,000
Balance $412,000
Paid in capital in excess of par - Preferred stock
Mar 1 $28,250
Nov 1 $27,500
Balance $55,750
Paid in capital in excess of stated value - Common stock
Jan 10 $151,000
April 1 $33,000
May 1 $190,125
Aug 1 $19,000
Sep 1 $40,000
Balance $433,125
c. Now the preparation is presented below:
Bramble Corporation
Balance Sheet Partial
As of December 31, 2020
Stockholders Equity
Capital Stock
Preferred Stock $815,000
Common Stock $412,000
Total Capital Stock $1,227,000 (A)
Additional Paid in capital
Paid in Capital in Excess of Par-Preferred Stock $55,750
Paid in Capital in Excess of Stated Value-Common Stock $433,125
Total Additional Paid in Capital $488,875 (B)
Total Stockholders Equity $1,715,875 (A + B)
