Prepare the appropriate journal entries, if required, for thefollowing items:1) Sold 250,000 shares common...Prepare...

Free

80.2K

Verified Solution

Question

Accounting

Prepare the appropriate journal entries, if required, for thefollowing items:
1) Sold 250,000 shares common stock at $5 cash each, $.01 parvalue
2) Bought back 1,000 shares of company common stock at $6 ashare to use for management incentives etc.
3) Issued 100,000 shares of preferred stock for cash, $0.10 parvalue, for $30 a share.
4) Company declared a 2 for 1 stock split when there were2,000,000 shares outstanding

Answer & Explanation Solved by verified expert

4.3 Ratings (946 Votes)

Transaction	Account title and explanation	Debit	Credit
1	Cash (250,000x$5)	1,250,000
	Common stock (250,000x$0.01)		2,500
	Paid in capital in excess of par value-Common stock		1,247,500

2	Treasury stock (1,000x$6)	6,000
	Cash		6,000

3	Cash (100,000x$30)	3,000,000
	Preferred stock (100,000x$0.10)		10,000
	Paid in capital in excess of par value-Common stock		2,990,000

4	No entry is required

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingPrepare the appropriate journal entries, if required, for thefollowing items:1) Sold 250,000 shares common...Prepare the appropriate journal entries, if required, for thefollowing items:1) Sold 250,000 shares common stock at $5 cash each, $.01 parvalue2) Bought back 1,000 shares of company common stock at $6 ashare to use for management incentives etc.3) Issued 100,000 shares of preferred stock for cash, $0.10 parvalue, for $30 a share.4) Company declared a 2 for 1 stock split when there were2,000,000 shares outstanding