Problems Problem 1 Stonehurst Corporation is authorized to issue 100,000 shares of $5 stated value common stock and 2,000 shares of $100 par value, 6 percent preferred stock. Prepare entries in journal form without explanations to record the following transactions Issued 1,000 shares of common stock to an attorney for a bill of $7,000 in connection with the organization of the corporation. Issued 2,000 shares of preferred stock for cash of $120 per share Issued 10,000 shares of common stock in exchange for land for a plant site valued at $75,000. Issued 5,000 shares of common stock for $35,000 in cash July 15 25 27 Aug. 1 Problem 2 On January 2, 2010, Horst Corporation issued ten-year, 8 percent bonds with a face value of $1,000,000. The semiannual interest dates are June 30 and December 31. The bonds were issued for $875,480 to yield a market interest rate of 10 percent. The accounting year ends on December 31. Prepare entries in journal form without explanations to record the bond issue on January 2, 2010, and the payments of interest and amortization of discount on June 30 and December 31, 2010. Use the straight-line method of amortization, Round answers to the nearest dollar. Problem 3 Indicate on the blanks below the letter of the type of activity (O- operating activity, F financing activity, I- investing activity, N- noncash transaction) each of the following transactions represents. 1. Firm sold 8,000 shares of its own common stock for cash. 2. Sold $200,000 worth of products for cash. 3. Paid $120,000 dividend. 4. Received $1,500 in interest income. 5. Exchanged 6,000 shares of stock for 15-year bonds. 6. Paid $121,000 to the U.S. Treasury for income taxes