Overland Corporation is authorized to issue 250,000 shares of $1
par value common stock. During 2017, Overland Corporation took part
in the following selected transactions.
? Issued 55,000 shares of stock at $76 per share, less costs
related to the issuance of the stock totaling $27,000.
? Issued 10,000 shares of stock for land appraised at $815,000. The
stock was actively traded on a national stock exchange at
approximately $78 per share on the date of issuance.
? Purchased 6,000 shares of treasury stock at $74 per share. The
treasury shares purchased were issued in 2006 at $46 per
share.
Instructions
(a) Prepare the journal entry to record item 1.
(b) Prepare the journal entry to record item 2.
(c) Prepare the journal entry to record item 3 using the cost
method.
Solution:
Journal Entries - Overland Corporation | |||
Event | Particulars | Debit | Credit |
a | Cash Dr (55000*$76 - $27,000) | $4,153,000.00 | |
To common stock | $55,000.00 | ||
To Paid in capital in excess of par - Common stock | $4,098,000.00 | ||
(To record issue of shares) | |||
b | Land Dr | $780,000.00 | |
To common stock | $10,000.00 | ||
To Paid in capital in excess of par - Common stock | $770,000.00 | ||
(To record purchase of land by issuing shares) | |||
c | Treasury Stock Dr | $444,000.00 | |
To Cash | $444,000.00 | ||
(To record purchase of own shares) |
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