Incentive Corporation was authorized to issue 12,000 shares of common stock, eac
ID: 2469802 • Letter: I
Question
Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $2 par value. During its first year, the following selected transactions were completed: a. Issued 5,100 shares of common stock for cash at $21 per share. b. Issued 1,100 shares of common stock for cash at $24 per share.
Prepare the journal entry required for each of these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
a. Record the issuance of 5,100 shares of common stock with a par value $2 for a price of $21 per share.
b. Record the issuance of 1,100 shares of common stock with a par value $2 for a price of $24 per share
2.Prepare the journal entry required for each of these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
3. Prepare the stockholders' equity section as it should be reported on the year-end balance sheet. At year-end, the accounts reflected Net income of $200. INCENTIVE CORPORATION Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital: Total Contributed Capital 0 Total Stockholders' Equity 0Explanation / Answer
2a) Cash Dr 107100 Common stock Cr 10200 Additional paid in capital - common stock Cr 96900 ( o record issuance of 5100 shares @ 21 each) 2b) Cash Dr 26400 Common stock Cr 2200 Additional paid in capital - common stock Cr 24200 ( o record issuance of 1100 shares @ 24 each) 3) Contributed capital Common stock 6200 shares @ $ 2 each 12400 Additional paid in capital 121100 Total contributed capital 133500 Add Net Income 200 Total stockholders equity 133700