Question

DeLong Corporation was organized on January 1, 2017. It is authorized to issue 14,500 shares of 8%, $100 par value preferred stock, and 450,000 shares of no-par common stock with a stated value of $3 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 84,500 shares of common stock for cash at $6 per share.
Mar. 1 Issued 5,150 shares of preferred stock for cash at $110 per share.
Apr. 1 Issued 23,500 shares of common stock for land. The asking price of the land was $91,000. The fair value of the land was $81,500.
May 1 Issued 84,000 shares of common stock for cash at $5.00 per share.
Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $39,500 for services performed in helping the company organize.
Sept. 1 Issued 11,500 shares of common stock for cash at $7 per share.
Nov. 1 Issued 2,000 shares of preferred stock for cash at $111 per share.

Journalize the transactions.

Answer 1

Answer and Explanation:

According to the scenario, computation of the given data are as follow:

Journal entries

On Jan. 10

Cash A/c ($6 × 84,500) Dr. $507,000

To Common stock A/c ($3 ×84,500) $253,500

To Paid in capital in excess of stated value common stock A/c $253,500

On Mar. 1

Cash A/c($110 × 5,150) A/c Dr. $566,500

To Preferred stock A/c ($100 × 5150) $515,000

To Paid in capital in excess of par –preferred stock A/c $51,500

(Being the issuance of the preferred stock is recorded)

On April 1

Land A/c Dr. $81500

To Common stock A/c ($3 × 23,500) $70,500

To Paid in capital in excess of stated value common stock A/c $11,000

(Being the issuance of the common stock is recorded)

On May 1

Cash A/c ($5 × 84,000) Dr. $420,000

To Common stock A/C($3 × 84,000) $252,000

To Paid in capital in excess of stated value common stock A/c $168,000

(Being the issuance of the common stock is recorded)

On Aug. 1

Organizational expenses A/c Dr. $39,500

To Common stock A/c ($3 × 10,000) $30,000

To Paid in capital in excess of stated value common stock A/c $9,500

(Being the issuance of the common stock is recorded)

On Sep 1

Cash A/c ($7 × 11,500) Dr. $80,500

To Common stock ($3 × 11,500) $34,500

To Paid in capital in excess of stated value common stock A/c $46,000

(Being the issuance of the common stock is recorded)

On Nov 1

Cash A/c ($111 × 2,000) Dr. $222,000

To Preferred stock A/c ($100 × 2,000) $200,000

To Paid in capital in excess of par-preferred stock A/c $22,000

(Being the issuance of the preferred stock is recorded)