Question

On January 22, Jefferson County Rocks Inc., a marble contractor, issued for cash 55,000 shares of $8 par common stock at $27, and on February 27, it issued for cash 90,000 shares of preferred stock, $4 par at $7.

a. Journalize the entries for January 22 and February 27.

If an amount box does not require an entry, leave it blank.

Jan. 22 ..................................

         .....................................

          ....................................

Feb. 27..................................

          ..................................

          ..................................

What is the total amount invested (total paid-in capital) by all stockholders as of February 27?

Answer 1

a.

Date	General Journal	Debit	Credit
Jan. 22	Cash	$1,485,000
	Common stock		$440,000
	Paid in capital in excess of par - common		$1,045,000

Date	General Journal	Debit	Credit
Feb. 27	Cash	$630,000
	Preferred stock		$360,000
	Paid in capital in excess of par - Preferred		$270,000

b.

Total paid in capital = Number of common shares issued x Issue price per common share + Number of preferred shares issued x Issue price per preferred shares

= 55,000 x 27 + 90,000 x 7

= 1,485,000+630,000

= $2,115,000

The total amount invested (total paid-in capital) by all stockholders as of February 27= $2,115,000