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  3. the following transactions relate to sunlight moun

The following transactions relate to Sunlight Mountain Inc. Prepare journal entries for each transaction. Prepare the...

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Accounting

The following transactions relate to Sunlight Mountain Inc.Prepare journal entries for each transaction. Prepare the equitysection of the balance sheet at each year-end, December 31. Assume2015 was Sunlight’s first year of operations.

  1. Sunlight issued 1,000 shares of $1 par value commonstock for $70 per share on January 1, 2015.

DATE

ACCOUNT NAME

DEBIT

CREDIT

BALANCE SHEET

INCOME STMT

A

=

L

+

E

R

-

E

1/1/15

  1. Sunlight issued 500 shares of no par value, $5,non-cumulative preferred stock for $50 per share on January 1,2015.

DATE

ACCOUNT NAME

DEBIT

CREDIT

BALANCE SHEET

INCOME STMT

A

=

L

+

E

R

-

E

1/1/15

  1. Sunlight reported net income of $2,000 during 2015 andpaid no dividends. Prepare the company’s equity section of theDecember 31, 2015, balance sheet.

Stockholders’ Equity:

Total Stockholder's Equity

  

Answer & Explanation Solved by verified expert
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Event DATE ACCOUNT NAME DEBIT CREDIT BALANCE SHEET INCOME STMT
A L E R E
a 01-01-2015 Cash 70000 70000
    Common Stock 1000 1000
    Additiona Paid in capital, in excess of par, Common 69000 69000
b 01-01-2015 Cash 25000 25000
    Preferred Stock 2500 2500
    Additiona Paid in capital, in excess of par, Preferred 22500 22500
Equity Section:
Common Stock $    1,000
Preferred Stock $    2,500
Additional Paid in capital, Common $ 69,000
Additional Paid in capital, Preferred $ 22,500
Total paid in capital $ 95,000
Add: Net Income $    2,000
Total Stockholder's Equity $ 97,000

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