Prepare the journal entry for each of the following transactions. Firm Body Corporation sells 12,000 shares of
Question:
Prepare the journal entry for each of the following transactions.
- Firm Body Corporation sells 12,000 shares of $10 par common stock for $13 per share.
- Firm Body Corporation sells 5,000 shares of $50 par, $10, cumulative preferred stock for $59 per share.
- Received a building with a market value of $115,000 and issued 6,400 shares of $10 par common stock in exchange.
Problem 2 (8 Points)
Prytania Corporation is authorized to issue 1,000,000 shares of $5 par value common stock. During 2017, its first year of operation, the company has the following stock transactions.
Jan. 1 Paid the state $5,000 for incorporation fees.
Jan. 15 Issued 500,000 shares of stock at $6 per share.
Jan. 30 Attorneys for the company accepted 500 shares of common stock as
payment for legal services rendered in helping the company
incorporate. The legal services are estimated to have a value of
$7,000.
July 2 Issued 100,000 shares of stock for land. The land had an asking price
of $900,000. The stock is currently selling on a national exchange at
$8 per share.
Sept. 5 Purchased 15,000 shares of common stock for the treasury at $9 per
share.
Dec. 6 Sold 11,000 shares of the treasury stock at $11 per share.
Problem 3 (3 Points)
On January 1, 2017, Borse Company issued bonds with a face value of $800,000. The bonds carry a stated interest of 7% payable each January 1.
Instructions
a. Prepare the journal entry for the issuance assuming the bonds are issued at 95.
b. Prepare the journal entry for the issuance assuming the bonds are issued at 105.
Problem 4 (5 Points)
On January 1, 2017, Heedy Corporation issued $3,000,000 of 8%, 10-year bonds payable
at face value. Interest is payable semiannually on July 1, and January 1.
Instructions
Present journal entries to record the following events:
- The issuance of bonds.
- The payment of interest in July.
- The accrual of interest on December 31.
- The payment of interest on January 1, 2018.
- The redemption of bonds at maturity.
Problem 5 (8 Points)
The following stockholders' equity accounts, arranged alphabetically, are in the ledger of Telex Inc. on December 31, 2017.
Common Stock ($20 par value) $900,000
Paid-in Capital in Excess of Par Value-Common Stock 190,000
Preferred Stock (10%, $50 par) 100,000
Paid-in Capital in Excess of Par-Preferred Stock 10,000
Padi in Capital from Treasury Stock 2,000
Retained Earnings 350,000
Treasury Stock (600 common shares) 27,000
Instructions
Prepare the stockholders' equity section of the balance sheet on December 31, 2017.
Problem 6 (7 Points)
Using the following account and balances, prepare the Stockholders' Equity section of the balance sheet. 40,000 shares of common stock are authorized, and 5,000 shares have been reacquired.
Common stock $1,500,000
Paid-in Capital from Treasury Stock 44,000
Paid-in Capital from Common Stock 160,000
Retained earnings 4,395,000
Treasury Stock (5,000 shares 120,000
Intermediate Accounting
ISBN: 978-1118300855
10th Canadian Edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy