Question

Larkspur, Inc. issues 7,600 shares of $108 par value preferred stock for cash at $116 per share.

Journalize the issuance of the preferred stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

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Answer 1

Solution

Account Titles and Explanation	Debit	Credit
Cash	$      881,600.00
Preferred stock		$      820,800.00
Paid in capital in excess of par- Preferred stock		$        60,800.00
(To record issue of preferred stock)

Working

Account Titles and Explanation	Debit	Credit
Cash	=7600 x 116
Preferred stock		=7600 x 108
Paid in capital in excess of par- Preferred stock		=7600 x 8
(To record issue of preferred stock)