Question

Cayman Corporation begins operations on March 1 by issuing 100,000
shares of $1 par value common stock for cash at $12 per share. On
March 15, it issues 5,000 shares of common stock to attorneys in
settlement of their bill of $50,000 for organization costs. On March 28,
Cayman Corporation issues 1,500 shares of $10 par value preferred
stock for cash at $30 per share. Journalize the issuance of the common
and preferred shares, assuming the shares are not publicly traded.

Mar. 1 :  

Answer 1

The following journal entries will be prepared for the given transactions:

Date	Account Titles and Explanation	Debit	Credit
Mar. 1	Cash (100,000 shares x $12)	1200000
	Common Stock (100,000 shares x $1)		100000
	Paid-in Capital in Excess of Par - Common Stock (100,000 shares x $11)		1100000
Mar. 15	Organization Costs	50000
	Common Stock (5,000 shares x $1)		5000
	Paid-in Capital in Excess of Par - Common Stock ($50,000 - $5,000)		45000
Mar. 28	Cash (1,500 shares x $30)	45000
	Preferred Stock (1,500 shares x $10)		15000
	Paid-in Capital in Excess of Par - Preferred Stock (1,500 shares x $20)		30000