Question

Ivanhoe Corporation was organized on January 1, 2020. It is authorized to issue 9,500 shares of 8%, $100 par value preferred stock, and 516,800 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 80,020 shares of common stock for cash at $7 per share.
Mar. 1 Issued 5,750 shares of preferred stock for cash at $111 per share.
Apr. 1 Issued 24,660 shares of common stock for land. The asking price of the land was $91,520; the fair value of the land was $80,020.
May 1 Issued 80,020 shares of common stock for cash at $9 per share.
Aug. 1 Issued 9,500 shares of common stock to attorneys in payment of their bill of $49,100 for services rendered in helping the company organize.
Sept. 1 Issued 9,500 shares of common stock for cash at $11 per share.
Nov. 1 Issued 970 shares of preferred stock for cash at $115 per share.
Instructions
Prepare the journal entries to record the above transactions.

Answer 1

Ivanhoe Corporation

Journal Entries:

Jan. 10: Debit Cash $560,140

Credit Common Stock $80,020

Credit Additional Paid-in Capital - Common Stock $480,120

To record the issuance of 80,020 shares of common stock for cash at $7 per share.

Mar. 1: Debit Cash $638,250

Credit 8% Preferred stock $575,000

Credit Additional Paid-in Capital -Preferred Stock $63,250

To record the issuance of 5,750 shares of preferred stock for cash at $111 per share.

Apr. 1: Debit Land $80,020

Credit Common Stock $24,660

Credit Additional Paid-in Capital - Common Stock $55,360

To record the issuance of 24,660 shares of common stock for land with a fair value of $80,020

May 1: Debit Cash $720,180

Credit Common Stock $80,020

Credit Additional Paid-in Capital - Common Stock $640,160

To record the issuance of 80,020 shares of common stock for cash at $9 per share.

Aug. 1: Debit Attorney Fees Expense $49,100

Credit Common Stock $9,500

Credit Additional Paid-in Capital- Common Stock $39,600

To record the issuance of 9,500 shares of common stock to attorneys in payment of their bill of $49,100 for services rendered in helping the company organize.

Sept. 1: Debit Cash $104,500

Credit Common Stock $9,500

Credit Additional Paid-in Capital - Common Stock $95,000

To record the issuance of 9,500 shares of common stock for cash at $11 per share.

Nov. 1: Debit Cash $111,550

Credit 8% Preferred Stock $97,000

Credit Additional Paid-in Capital - Preferred Stock $14,550

To record the issuance of 970 shares of preferred stock for cash at $115 per share.

Step-by-step explanation:

a) Data and Analysis of Transactions:

Jan. 10: Cash $560,140 Common Stock $80,020 Additional Paid-in Capital - Common Stock $480,120

Mar. 1: Cash $638,250 8% Preferred stock $575,000 Additional Paid-in Capital -Preferred Stock $63,250

Apr. 1: Land $80,020 Common Stock $24,660 Additional Paid-in Capital - Common Stock $55,360

May 1: Cash $720,180 Common Stock $80,020 Additional Paid-in Capital - Common Stock $640,160

Aug. 1: Attorney Fees Expense $49,100 Common Stock $9,500 Additional Paid-in Capital- Common Stock $39,600

Sept. 1: Cash $104,500 Common Stock $9,500 Additional Paid-in Capital - Common Stock $95,000

Nov. 1: Cash $111,550 8% Preferred Stock $97,000 Additional Paid-in Capital - Preferred Stock $14,550