Question

On April 7, the Moore Company issued 5,000 shares of $50 par value preferred stock at $106 per share. Please write the journal entry:

On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current fair-market price of $70 per share. Please write the journal entry:

Answer 1

Journal entries:

Date	Accounts Title and Explanation	Debit($)	Credit($)
April 07	Cash	530000
	Preferred Stock		250000
	Paid in capital in Excess of Par – Preferred stock		280000
	(Issue of preferred stock in excess of par)
April 10	Land	70000
	Common stock		20000
	Paid in capital in Excess of Par – Common stock		50000
	(Issued of common stock in exchange of land)

Working:

April 07:

Par value of preferred stock = Number of shares*par value =5000*50 = $250000

Premium on preferred stock = (106-50)*5000 = $280000

April 10:

Par value of common stock = Number of shares*par value =1000*20 = $20000

Premium on preferred stock = (70-20)*1000 = $50000

answered by: anonymous