Jan 3 Cash . . .345,000
. . . . . . . . . Common stock . . . .45,000
. . . . . . . . . . Pr-in capital above par . . .
Why does this pose a problem for you? If you studied the material, this is very easy to understand.
Journal entries describe the exchange taking place in a transaction. You record what you received and what you gave up. It makes no sense to try to memorize journal entries. The idea is to analyze what was exchanged. You received or gave up assets and you use the debit and credit rules to record that. You incurred a liability (gave a promise to pay later) or you got your promise back because you discharged the liability. Again a credit or debit. Similarly with capital. You issued stock for cash so you received cash (a debit) and record a credit in owners’ equity representing the owner’s interest in the business assets. You can also issue stock in exchange for services or assets other than cash.
It is not appropriate of you to assign your homework to others. To get help you should do the work as well as you can and provide your solution so someone can help you by pointing out where you are wrong and by explaining areas where you show weaknesses.
A corporation was organized on January 1 of the current year, with an authorization of 20,000 shares of $4 preferred stock, $12 par, and 100,000 shares of $3 par common stock.
The following selected transactions were completed during the first year of operations:
Jan. 3
Issued 15,000 shares of coomon stock at $23 per share for cash.
Jan. 31
Issued 200 shares of common stokc at par to an attorney inpayment of legel fees for organizing the corporation. The value of the stock at the time of payment was $25 per share.
Feb. 24
Issued 20,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $65,000 $120,000, and $45,000 respectively.
Mar. 15
Issued 2,000 shares of preferred stock at $56 for cash
Need to Journalize the above transactions.
