I really could use help on this problem..... It says the company X issues 300 sh
ID: 2348400 • Letter: I
Question
I really could use help on this problem.....It says the company X issues 300 shares of $50 par preferred stock and 1,000 shares of $10 par common stock in a "package" sale. Total proceeds received amount to $39,000.
Record the transaction for each independent assumption shown:
1. The common stock has a current market value of $19 per share; the current market value of preferred stock is not known.
2. The common stock and the preferred stock have a current market value per share of $22 and $60, respectively.
Explanation / Answer
1. Cash Dr 39000 Common Stock $10 Par Cr 10,000 Addl Paidup capital on Common Stock Cr 9000 Pref Stock $50 par Cr 15000 Paid-in Capital in Excess of Par Preferred Cr 5000 2. common $22 x1,000 $22,000 preferred $60 x 300 18,000 $40,000 market value 22/40 x $39,000 = $21,450 common 18/40 x $39,000 = $17,550 preferred $39,000 Cash Dr 39000 Common Stock $10 Par Cr 10,000 Addl Paidup capital on Common Stock Cr 11450 Pref Stock $50 par Cr 15000 Addl Paidup capital on Pref Stock Cr 2550