Question

The stockholders’ equity accounts of Sunland Company on January 1, 2019, were as follows.

Preferred Stock (8%, $52 par, cumulative, 10,000 shares authorized)		$  390,000
Common Stock ($1 stated value, 1,900,000 shares authorized)		1,100,000
Paid-in Capital in Excess of Par—Preferred Stock		125,000
Paid-in Capital in Excess of Stated Value—Common Stock		1,400,000
Retained Earnings		1,750,000
Treasury Stock (10,000 common shares)		50,000

During 2019, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Feb.	1		Issued 25,000 shares of common stock for $124,000.
Apr.	14		Sold 5,900 shares of treasury stock—common for $33,100.
Sept.	3		Issued 5,000 shares of common stock for a patent valued at $34,300.
Nov.	10		Purchased 1,100 shares of common stock for the treasury at a cost of $6,200.
Dec.	31		Determined that net income for the year was $435,000.

Answer 1

Journal entry :

Date	accounts & explanation	debit	credit
Feb 1	Cash	124000
	Common Stock		25000
	Paid-in Capital in Excess of Stated Value—Common Stock		99000
	(To record issue common stock)
Apr 14	Cash	33100
	Treasury stock (5900*5)		29500
	Paid in capital from sale of treasury stock		3600
	(To record sold treasury stock)
Sep 3	Patent	34300
	Common Stock		5000
	Paid-in Capital in Excess of Stated Value—Common Stock		29300
	(To record common stock)
Nov 10	Treasury stock	6200
	Cash		6200
	(To record purchase treasury stock)
Dec 31	Income summary	435000
	Retained earnings		435000
	(To record net income)