Question

Ryuji Corporation is authorized to issue 53,000 shares of $5 par value common stock. During 2020, Blue took part in the following selected transactions.

1.		Issued 5,100 shares of stock at $49 per share, less costs related to the issuance of the stock totaling $6,800.
2.		Issued 1,100 shares of stock for land appraised at $53,000. The stock was actively traded on a national stock exchange at approximately $50 per share on the date of issuance.
3.		Purchased 480 shares of treasury stock at $41 per share. The treasury shares purchased were issued in 2016 at $38 per share.

(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.

Answer 1

Answer:

Event	Account Title and Explanation	Debit $	Credit$
1	Cash (5100*$49)-6800	243,100
	Common Stock (5100*$5)		25,500
	Paid in Capital-in excess of par-Common Stock		217,600
	(Entry to record common stock issued)
2	Land (1,100*$50)	55,000
	Common Stock (1,100*$5)		5,500
	Paid in Capital-in excess of par-Common Stock		49,500
	(To record land purchased in exchange of common stock)
3	Treasury Stock (480*$41)   -Cost as cost method	19,680
	Cash		19,680
	(Entry to record purchase of treasury stock)