Question

2. XYZ Corporation is authorized to issue 100,000 shares $ 3 stated value common stock and 50,000 shares of $ 5 par value preferred stock.

1. XYZ Corporation issued 10,000 shares common stock for $ 50,000.00. cash. XYZ Corporation issued 5,000 shares preferred stock for $ 55,000.00 cash.

2. XYZ Corporation issued 5000 shares of common stock to its attorneys in payment of $ 25,000 legal fees in helping to organize the corporation.

3. XYZ Corporation issued 15,000 shares of common stock for land, which had an asking price of $ 100,000.00. The market value of the land is

      $ 105,000.00. The common stock had a market value of $6 per share.

Prepare the necessary journal entries to record the above transactions.

Answer 1

Journal Entry- XYZ Corporation
S.No.	Accoutn Tittle	Debit	Credit
a.	Cash	$500,000.00
	Common Stock (10000*3)		$30,000.00
	Paid in Capital in Excess of Stated Value - Commons Stock		$470,000.00
	Cash	$55,000.00
	Preferred Stock (5000*5)		$25,000.00
	Paid in Capital in Excess of Par Value -Preferred Stock		$30,000.00
b.	Organizational Expense	$25,000.00
	Common Stock (5000*3)		$15,000.00
	Paid in Capital in Excess of Stated Value - Commons Stock		$10,000.00
c.	Land	$105,000.00
	Common Stock (15000*3)		$45,000.00
	Paid in Capital in Excess of Stated Value - Commons Stock		$60,000.00