Question

On January 22, Jefferson County Rocks Inc., a marble contractor, issued for cash 210,000 shares of $30 par common stock at $34, and on February 27, it issued for cash 15,000 shares of preferred stock, $9 par at $12.

Required:
Journalize the entries for January 22 and February 27.

Answer 1

Jan. 22

Dr Cash $7,140,000

Cr Common Stock $6,300,000

Cr Paid in capital in excess of par $840,000

Feb. 27

Dr Cash $180,000

Cr Preferred Stock $135,000

Cr Paid-In Capital in Excess of Par-Preferred $45,000

Step-by-step explanation:

Preparation of the entries for January 22 and February 27.

Jan. 22

Dr Cash $7,140,000

(210,000*$34)

Cr Common Stock $6,300,000

(210,000*$30)

Cr Paid in capital in excess of par $840,000

($7,140,000-$6,300,000)

Feb. 27

Dr Cash $180,000

(15,000*$12)

Cr Preferred Stock $135,000

(15,000*$9)

Cr Paid-In Capital in Excess of Par-Preferred $45,000

($180,000-$135,000)