Question

On January 22, Jefferson County Rocks Inc., a marble contractor, issued for cash 180,000 shares of $20 par common stock at $23, and on February 27, it issued for cash 25,000 shares of preferred stock, $7 par at $9.

A. Journalize the entries for January 22 and February 27.
Jan. 22 Cash
Common Stock
Paid-In Capital in Excess of Par-Common Stock
Feb. 27 Cash
Preferred Stock
Paid-In Capital in Excess of Par-Preferred
B. What is the total amount invested (total paid-in capital) by all stockholders as of February 27?

Answer 1

A. Journalize the entries for January 22 and February 27.

January 22, 202x, common stocks issued:

Dr Cash 4,140,000

Cr Common stock 3,600,000

Cr Additional paid in capital: common stock 540,000

February 27, 202x, preferred stocks issued:

Dr Cash 225,000

Cr Preferred stock 175,000

Cr Additional paid in capital: preferred stock 50,000

B. What is the total amount invested (total paid-in capital) by all stockholders as of February 27?

$4,140,000 + $225,000 = $4,365,000