Question

Flint Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, he made the following entries for the corporation’s capital stock.

May 2		Cash		109,200
		Capital Stock				109,200
		(Issued 7,800 shares of $12 par value common stock at $14 per share)
10		Cash		612,000
		Capital Stock				612,000
		(Issued 12,000 shares of $20 par value preferred stock at $51 per share)
15		Capital Stock		11,550
		Cash				11,550
		(Purchased 770 shares of common stock for the treasury at $15 per share)

On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions. (Record journal entries in the order presented in the problem. 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.)

Answer 1

Journal entry :

Date	accounts & explanation	debit	credit
May 2	Cash (7800*14)	109200
	Common Stock (7800*12)		93600
	Paid in capital in excess of par-Common Stock		15600
	(To record issue common stock)
May 10	Cash (12000*51)	612000
	Preferred stock (12000*20)		240000
	Paid in capital in excess of par-Preferred stock		372000
	(To record issue preferred stock)
May 15	Treasury stock	11550
	Cash		11550
	(To record stock repurchased)