Answer:
1. Jan. 10
Dr Cash $280,000
Cr Common Stock $70,000
Cr AdditionalPaid-in Capital-Common $210,000
Mar. 1
Dr Cash $636,000
Cr Preferred Stock $600,000
Cr Additional Paid-in Capital-Preferred $36,000
May 1
Dr Cash $720,000
Cr Common Stock $120,000
Cr Additional Paid-in Capital-Common $600,000
Sept. 1
Dr Cash $25,000
Cr Common Stock $5,000
Cr Additional Paid-in Capital-Common $20,000
Nov. 1
Dr Cash $168,000
Cr Preferred Stock $150,000
Cr Additional Paid-in Capital-Preferred $18,000
Explanation:
Preparation of the journal entries
1. Jan. 10
Dr Cash (70,000x$4) $280,000
Cr Common Stock (70,000x$1) $70,000
Cr AdditionalPaid-in Capital-Common $210,000
($280,000-$70,000)
Mar. 1
Dr Cash (12,000x$53) $636,000
Cr Preferred Stock (12,000x$50) $600,000
Cr Additional Paid-in Capital-Preferred $36,000
($636,000-$600,000)
May 1
Dr Cash (120,000x$6) $720,000
Cr Common Stock (120,000x$1) $120,000
Cr Additional Paid-in Capital-Common $600,000
($720,000-$600,000)
Sept. 1
Dr Cash (5,000x$5) $25,000
Cr Common Stock (5,000x$1) $5,000
Cr Additional Paid-in Capital-Common $20,000
($25,000-$5,000)
Nov. 1
Dr Cash (3,000x$56) $168,000
Cr Preferred Stock(3,000x$50) $150,000
Cr Additional Paid-in Capital-Preferred $18,000
($168,000-$150,000)
