Question

Blue Corporation, a private corporation, was organized on February 1, 2023. It is authorized to issue 99,600,$6 noncumulative preferred shares, and an unlimited number of common shares. The following transactions were completed during the first year:

Feb. 10 Issued 79,680 common shares at $4 per share.
Mar, 1 Issued 4,980 preferred shares at $114 per share.
Apr. 1 Issued 22,410 common shares for land. The land's asking price was $99,600 and its appraised value was $89,640.
June 20 Issued 77,688 common shares at $4,50 per share.
July 7 Issued 9,960 common shares to lawyers to pay for their bill of $44,820 for services they performed in helping the comp
Sept. 1 Issued 9,960 commonshares at $5 per share.
Nov. 1 Issued 996 preferred shares at $120 per share.
Journalize the transactions

Answer 1

The Blue Corporation issued both common and preferred stock and received cash, land, and legal services in exchange. Journal entries have been provided for each transaction, demonstrating how these transactions affect the financial position of the corporation.

Step-by-step explanation:

To journalize the transactions for the Blue Corporation, we'll record the issuance of both common and preferred shares, as well as accounting for the receipt of different assets in exchange for these shares. Journal entries are used to record all the transactions that affect the company's financial status.

Journal Entries for Blue Corporation

1. Common Shares Issuance: On February 10, the corporation issued 79,680 common shares at $4 per share.
   Debit Cash: 79,680 shares * $4/share = $318,720
   Credit Common Stock: $318,720
2. Preferred Shares Issuance: On March 1, the corporation issued 4,980 preferred shares at $114 per share.
   Debit Cash: 4,980 shares * $114/share = $567,720
   Credit Preferred Stock: $567,720
3. Land Transaction: On April 1, 22,410 common shares were issued for land valued at $89,640 (appraised value).
   Debit Land: $89,640
   Credit Common Stock: $89,640
4. Common Shares Issuance: On June 20, 77,688 common shares were issued at $4.50 per share.
   Debit Cash: 77,688 shares * $4.50/share = $349,596
   Credit Common Stock: $349,596
5. Payment for Legal Services: On July 7, 9,960 common shares were issued to pay a legal bill of $44,820.
   Debit Legal Expenses: $44,820
   Credit Common Stock: $44,820
6. Common Shares Issuance: On September 1, 9,960 common shares were issued at $5 per share.
   Debit Cash: 9,960 shares * $5/share = $49,800
   Credit Common Stock: $49,800
7. Preferred Shares Issuance: On November 1, 996 preferred shares were issued at $120 per share.
   Debit Cash: 996 shares * $120/share = $119,520
   Credit Preferred Stock: $119,520

Each of these entries reflects the transaction on the date specified, and records the increase in cash or other assets along with the corresponding increase in stockholder's equity.