Question

Ryuji Corporation is authorized to issue 53,000 shares of $5 par value common stock. During 2020,...

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.

Homework Answers

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)

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