Presented below is information related to Willis Company: The company is granted

Question

Presented below is information related to Willis Company: The company is granted a charter that authorizes issuance of 15,000 shares of $100 par value preferred stock and 40,000 shares of no-par common stock. 9,000 shares of common stock are issued to the founders of the corporation for land valued by the board of directors at $300,000. The board establishes a stated value of $10 a share for the common stock. 6,000 shares of preferred stock arc sold for cash at $110 per share. The company issues 150 shares of common stock to its attorneys for costs associated with starting the company. At that time, the common stock was selling at $60 per share. Prepare the general journal entries necessary to record these transactions.

Explanation / Answer

Solution:

Journal Entries:

S.No General Journal Debit Credit 1 No entry necessary 2 Land    300,000 Common Stock (9,000 * 10)      90,000 Paid-in Capital in Excess of Stated Value    210,000 3 Cash (6,000 * 110)    660,000 Preferred Stock (6,000 * 100)    600,000 Paid-in Capital in Excess of Par—Preferred Stock      60,000 4 Organization Expense (150 * 60)        9,000 Common Stock (150 * 10)        1,500 Paid-in Capital in Excess of Stated Value        7,500

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---