Chapter 11, Problem 11.1AP

(a)

To determine

No-par common stock: The common stock that is issued at its fair market value is known as no-par common stock. Common stock are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receives a share of profit from the profits earned by the corporation.

Preferred stock: The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock.

Par value: It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock.

To Journalize: the issuance of common stock and preferred stock for Corporation Tw.

(b)

To determine

To post: the journal entries into stockholders’ equity accounts.

(c)

To determine

To Prepare: the paid-in capital portion of stockholders’ equity section of balance sheet for Corporation Tw as at December 31, 2014.