Explanation 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. It provides the owners’ to vote at stockholders’ meeting, purchase additional shares if more shares are issued by the corporation, share in earnings distributions and share in the assets if the corporation liquidates. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Accounting rules for Journal entries: To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains. To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains. Record the journal entries: (a) Issued 5,000 shares of common stock with a $5 par value in exchange for real estate (land) with a fair market value of $27,500. Date Account Title and Explanation Debit ($) Credit ($) Land 27,500 Common Stock (5,000 shares × $5) 25,000 Paid-In Capital in Excess of Par— Common Stock ($27,500 − $25,000) 2,500 ( To record issuance of common stock in exchange for real estate-land at premium) Table (1) (b) Issued 7,500 shares of common stock with a $5 par value and $6 fair market value in exchange for a building with an uncertain fair market value. Date Account Title and Explanation Debit ($) Credit ($) Building (7,500 shares × $6) 45,000 Common Stock (7,500 shares × $5) 37,500 Paid-In Capital in Excess of Par— Common Stock ($45,000 − $37,500) 7,500 ( To record issuance of common stock in exchange for real building at premium) Table (2) (c) Received subscriptions for 10,000 shares of $5 par common stock for $65,000. Date Account Title and Explanation Debit ($) Credit ($) Common Stock Subscriptions Receivable 65,000 Common Stock Subscribed (10,000 shares × $5) 50,000 Paid-In Capital in Excess of Par— Common Stock ($65,000 − $50,000) 15,000 ( To record subscriptions received) Table (3) (d) Received a payment of $30,000 on the stock subscription in transaction (c). Date Account Title and Explanation Debit ($) Credit ($) Cash 30,000 Common Stock Subscriptions Receivable 30,000 ( To record subscriptions received) Table (4) (e) Received the balance in full for the stock subscription in transaction (c) and issued the stock

23rd Edition

ISBN: 9780357069493

Author: HEINTZ

Publisher: CENGAGE L

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Question

Chapter 20, Problem 4SEA

To determine

Prepare general entries for each transaction.

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Chapter 20 Solutions

COLLEGE ACCOUNTING CH. 1-9 (LOW COST)

Ch. 20 - Prob. 1TF Ch. 20 - Prob. 2TF Ch. 20 - Dividends are not taxable because these earnings...Ch. 20 - Prob. 4TF Ch. 20 - Prob. 5TF Ch. 20 - Prob. 1MC Ch. 20 - Prob. 2MC Ch. 20 - Prob. 3MC Ch. 20 - Stock subscriptions receivable are listed as...Ch. 20 - Treasury stock is listed as a(n) __________ on the...

Ch. 20 - Prob. 1CE Ch. 20 - Genous Company has 20,000 shares of common stock...Ch. 20 - Prepare general journal entries for the following...Ch. 20 - Prepare the stockholders equity section of the...Ch. 20 - Prob. 1RQ Ch. 20 - Prob. 2RQ Ch. 20 - Prob. 3RQ Ch. 20 - Prob. 4RQ Ch. 20 - Prob. 5RQ Ch. 20 - If a corporation issues only one class of stock,...Ch. 20 - Prob. 7RQ Ch. 20 - Prob. 8RQ Ch. 20 - How is common stock subscriptions receivable...Ch. 20 - Prob. 10RQ Ch. 20 - Prob. 11RQ Ch. 20 - ORGANIZATION COSTS BB Electric decided to...Ch. 20 - DIVIDEND ALLOCATIONS Situation 1 Nguyen Company...Ch. 20 - STOCK ISSUANCE (PAR, NO-PAR, AND STATED VALUE) The...Ch. 20 - Prob. 4SEA Ch. 20 - STOCKHOLDERS EQUITY SECTION After closing its...Ch. 20 - PAR AND NO-PAR, COMMON AND PREFERRED STOCK...Ch. 20 - STATED VALUE, COMMON AND PREFERRED STOCK, AND...Ch. 20 - STOCK SUBSCRIPTIONS Juneau Associates had the...Ch. 20 - STOCK SUBSCRIPTIONS AND TREASURY STOCK Nash Roth...Ch. 20 - STOCKHOLDERS EQUITY SECTION After closing its...Ch. 20 - Prob. 1SEB Ch. 20 - Prob. 2SEB Ch. 20 - STOCK ISSUANCE (PAR, NO-PAR, AND STATED VALUE) The...Ch. 20 - STOCK ISSUANCE (NONCASH ASSETS, SUBSCRIPTIONS, AND...Ch. 20 - STOCKHOLDERS EQUITY SECTION After closing its...Ch. 20 - PAR AND NO-PAR, COMMON AND PREFERRED STOCK Valdez...Ch. 20 - STATED VALUE, COMMON AND PREFERRED STOCK, AND...Ch. 20 - STOCK SUBSCRIPTIONS Athletics West had the...Ch. 20 - STOCK SUBSCRIPTIONS AND TREASURY STOCK Rogers ...Ch. 20 - STOCKHOLDERS EQUITY SECTION After closing its...Ch. 20 - Prob. 1MYW Ch. 20 - Prob. 1EC Ch. 20 - Stockholders equity accounts and other related...Ch. 20 - Prepare general journal entries for the following...

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