Answer:
King Corporation
Journal Entries:
a. Debit Cash $594,000
Credit Common stock $330,000
Credit Additional Paid-in Capital- Common $264,000
To record the issuance of 22,000 shares of common stock to each of the three organizers at $9 per share.
b. Debit Cash $180,000
Credit 10% Preferred stock $90,000
Credit Additional Paid-in Capital - Preferred $90,000
To record the issuance of 9,000 shares of the preferred stock at $20 per share.
c. Debit Cash $45,000
Credit 10% Preferred stock $10,000
Credit Additional Paid-in Capital- Preferred $10,000
Credit Common stock $12,500
Credit Additional Paid-in Capital-Common $12,500
To record the issuance of 1,000 shares of the preferred stock at $20 and 2,500 shares of common stock at $10 per share.
Explanation:
Data and Analysis:
a. Cash $594,000 Common stock $330,000 Additional Paid-in Capital- Common $264,000
22,000 shares of common stock to each of the three organizers and collected $9 cash per share from each of them.
b. Cash $180,000 10% Preferred stock $90,000 Additional Paid-in Capital - Preferred $90,000
9,000 shares of the preferred stock at $20 per share.
c. Cash $45,000 10% Preferred stock $10,000 Additional Paid-in Capital- Preferred $10,000 Common stock $12,500 Additional Paid-in Capital-Common $12,500
1,000 shares of the preferred stock at $20 and 2,500 shares of common stock at $10 per share.
