Question

Brief Exercise 15-4 Wildhorse Corporation issued 311 shares of $10 par value common stock and 112 shares of $50 par value preferred stock for a lump sum of $15,678. The common stock has a market price of $20 per share, and the preferred stock has a market price of $100 per share. Prepare the journal entry to record the issuance. (Round intermediate calculations to 6 decimal places, e.g. 0.546872 and final answers to 0 decimal places, e.g., 1,520. 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

Answer 1

Solution:

	Shares Issued	Market price per share	Total Market Value of Shares	Proportion of Market Values	Issue Price Allocated
Common Stock	311	$20	$6,220	0.357061	$5,598
Preferred Stock	112	$100	$11,200	0.642939	$10,080
Total			$17,420	1.000000	$15,678

No.	Accounts Title and explanation	Debit	Credit
1	Cash Dr	$5,598
	To Common Stock (311*$10)		$3,110
	To Paid in capital in excess of Par - Common Stock		$2,488
	(To record issue of Common Stock)
2	Cash Dr	$10,080
	To Preferred Stock (112*$50)		$5,600
	To Paid in capital in excess of Par - Common Stock		$4,480
	(To record issue of Preferred Stock)