Question

Sagan Co. had these transactions during the current period.

Answer 1

Answer:

The journal entries are shown below:

Explanation:

The journal entries are as follows

On June 12

Cash $300,000

        To  Paid-In Capital in Excess of Par- Common Stock $220,000

         To Common Stock $80,000    (80,000 shares × $1)

(Being the issuance of the common stock is issued and the remaining balance is credited to the paid in capital)

On July 11

Cash $318,000   (3,000 shares × $106)

   To  Preferred Stock $300,000  (3,000 shares × $100)

   To  Paid-In Capital in Excess of Par - Preferred Stock $18,000

(Being the issuance of the preferred stock is issued and the remaining balance is credited to the paid in capital)

On Nov 28

Treasury Stock $9,000

    To Cash $9,000

(Being the treasury stock is purchased)