Answer:
cash 27,000,000 debit
common stock 3,000,000 credit
additional paid-in 24,000,000 credit
--feb 12th issued shares--
legal services expense 414,000 debit
common stock 46,000 credit
additional paid-in 368,000 credit
--feb 13th shares issued for legal services--
cash 990,000 debit
common stock 86,000 credit
additional paid-in CS 688,000 credit
preferred stock 200,000 credit
additional paid-in PS 16,000 credit
--february 13th issuance of common and preferred shares--
equipment 3,808,000 debit
common stock 375,000 credit
additional paid-in CS 3,433,000 credit
--issuance of shares in exchange of equipment--
Explanation:
Feb 12th
cash proceeds: 3,000,000 x $9 = 27,000,000
common stock: 3,000,000 x $1 = 3,000,000
additional paid-in 24,000,000
Feb 13th
as the market value of the shares is 9 dollars we recognize this to valued the shares issued for legal services:
46,000 x 9 = 414,000
46,000 x 1 = 46,000
additional 368,000
Feb 13th
we calculate the preferred stock value based on the price of the common shares
total: 990,000
common shares: 89,000 x 9 = (774,000)
preferred shares: 216,000
now we calculate the additional paid-in:
additional on common shares: 86,000 x 8 = 688,000
preferred shares: 4,000 x 50 = 200,000
additional on preferred shares: 16,000
the equipment enter the accounting at his value so we calcualte the additional paid in by the difference:
3,808,000 Equipment - 375,000 face value of shares = 3,433,000
