Common stock : These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend. 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. Issue of common stock for noncash assets or services: Corporations often issue common stock for the services received from attorneys or consultants as compensation, or for the purchase of non-cash assets such as land, buildings, or equipment. To journalize: the transactions.

Question

Want to see the full answer?

Answer 1

Question

Chapter 11, Problem 11.8EX

To determine

Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend.

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.

Issue of common stock for noncash assets or services: Corporations often issue common stock for the services received from attorneys or consultants as compensation, or for the purchase of non-cash assets such as land, buildings, or equipment.

To journalize: the transactions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 50,000 shares of 3% preferred stock, $40 par and 600,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations: Journalize the transactions. July. 1. Issued 90,000 shares of common stock at par for cash. July. 1 Issued 400 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation. Aug. 7. Issued 16,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $30,000, $164,000, and $37,000, respectively. For a compound transaction, if an amount box does not require an entry, leave it blank. Sept. 20. Issued 30,000 shares of preferred stock at $49 for cash. For a compound transaction, if an amount box does not require an entry, leave it blank.

Issuing Stock Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 50,000 shares of 2% preferred stock, $55 par and 400,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations: Journalize the transactions. July. 1. Issued 130,000 shares of common stock at par for cash. July. 1 July. 1 Issued 400 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation. July. 1 Aug. 7. Issued 23,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $43,000, $234,000, and $52,000, respectively. For a compound transaction, if an amount box does not require an entry, leave it blank. Aug. 7 Sept. 20. Issued 20,000 shares of preferred stock at…

Issuing Stock Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 100,000 shares of 2% preferred stock, $40 par and 750,000 shares of $25 par common stock. The following selected transactions were completed during the first year of operations: Journalize the transactions. July. 1. Isued 155,000 shares of common stock at par for cash. July. 1 July. 1 Issued 550 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation. July. 1 Aug. 7. Issued 21,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $101,000, $550,000, and $123,000, respectively. For a compound transaction, if an amount box does not require an entry, leave it blank. Aug. 7