Question

Concord Corporation is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock.

Feb. 1 Issued 52,500 shares for cash at $53 per share.
July 1 Issued 70,000 shares for cash at $59 per share.

Required:
Journalize the transactions.

Answer 1

FEB 1

Dr Cash $2,782,500

Cr Preferred stock $2,625,000

Cr APIC $157,500

JUL 1

Dr Cash $3,710,000

Cr Preferred stock $3,500,000

Cr APIC $210,000

Step-by-step explanation:

Preparation of the journal entries

FEB 1

Dr Cash $2,782,500

(52,500 shares* $53 per shares)

Cr Preferred stock $2,625,000

(52,500 shares*$50per shares)

Cr APIC $157,500

($2,782,500-$2,625,000)

JUL 1

Dr Cash $3,710,000

(70,000 shares* $53 per shares)

Cr Preferred stock $3,500,000

(70,000 shares*$50per shares)

Cr APIC $210,000

($3,710,000-$3,500,000)