Question

Crane Co. had these transactions during the current period.

June 12
Issued 87,000 shares of $1 par value common stock for cash of $326.250.
July 11
Nov. 28
Issued 2,800 shares of $100 par value preferred stock for cash at $106 per share.
Purchased 3,450 shares of treasury stock for $8,250.
Prepare a tabular summary to record the Crane Co. transactions. Include margin explanations for the changes in revenues and
exbenses.

Answer 1

We have these following journal entries:

• June 12, Debit cash by $326,250, credit common stock by $87,000, and paid-in capital in excess of par-common stock by $239,250
• July 11, Debit cash by $299,600, credit common stock by $282,800, and paid-in capital in excess of par-preferred stock by $16,800
• November 28, Debit treasury stock and credit cash by $8,250

Common stock = Number of shares issued x Par value per common shares

= 87,000 x $1

= $87,000

Preferred stock = Number of preferred shares × Par value per preferred shares

= 2,800 x $101

= $282,800.

The journal entries are recorded as follows:

To record the issue of common stock: 2023-06-12

Dr Cash $326,250

CR Common Stock $87,000

CR Paid-In Capital in Excess of Par-Common stock $239,250

To record the issue of preferred stock: 2023-07-11

DR Cash $299,600

CR Preferred Stock $282,800

CR Paid-In Capital in Excess of Par-Preferred stock $16,800

To record the purchase of treasury stock: 2023-11-28

DR Treasury Stock $8,250

CR Cash $8,250