Problem 13-1A (Part level Submission)

DeLong Corporation was organized on January 1, 2014. It is authorized to issue 10,000 shares of 8%, \$100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of \$2 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 80,000 shares of common stock for cash at \$4 per share.

Mar. 1 Issued 5,000 shares of preferred stock for cash at \$105 per share.

Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was \$90,000. The fair value of the land was \$85,000.

May. 1 Issued 80,000 shares of common stock for cash at \$4.5 per share.

Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of \$30,000 for services performed in helping the company organize.

Sept. 1 Issued 10,000 shares of common stock for cash at \$5 per share.

Nov. 1 Issued 1,000 shares of preferred stock for cash at \$109 per share.

A) Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Jan. 10

 Account titles and explanation Debt Credit Cash  =80,000 x 4 320,000 Common stock =80,000 x 2 (\$4-\$2) 160,000 Paid-in Capital in Excess of Stated Value-Common Stock = 80,000 x 2 160,000

Mar. 1

 Account titles and explanation Debt Credit Cash 525000 Preferred stock 500,000 Paid-in Capital in Excess of Par-Preferred Stock 25,000

Cash = 5,000 x 105 =525000

Preferred Stock = 5,000 x 100 =500,000

Paid-in Capital in Excess of Par-Preferred Stock = 5,000 x 5 =25,000

Apr. 1

 Account titles and explanation Debt Credit Land 85,000 Common stock 48,000 Paid-in Capital in Excess of Stated Value-Common Stock 37,000

Common Stock = 24,000 x 2 =48,000

Paid-in Capital in Excess of Stated Value-Common Stock =85,000 – 48,000 =37,000

May. 1

 Account titles and explanation Debt Credit Cash 360,000 Common stock 160,000 Paid-in Capital in Excess of Stated Value-Common Stock 200,000

Cash = 80,000 x 4.5 = 360,000

Common Stock = 80,000 x 2 = 160,000

Paid-in Capital in Excess of Stated Value-Common Stock = 80,000 x 2.50 =200,000

Aug. 1

 Account titles and explanation Debt Credit Organization Expense 30,000 Common stock 20,000 Paid-in Capital in Excess of Stated Value-Common Stock 10,000

Common Stock =10,000 x 2 = 20,000

Paid-in Capital in Excess of Stated Value-Common Stock = 30,000 – 20,000 =10,000

Sept. 1

 Account titles and explanation Debt Credit Cash 50,000 Common stock 20,000 Paid-in Capital in Excess of Stated Value-Common Stock 30,000

Cash = 10,000 x 5 = 50,000

Common Stock = 10,000 x 2= 20,000

Paid-in Capital in Excess of Stated Value-Common Stock = 10,000 x 3 = 30,000

Nov. 1

 Account titles and explanation Debt Credit Cash 109,000 Preferred Stock 100,000 Paid-in Capital in Excess of Par-Preferred Stock 9,000

Cash = 1,000 x 109=109,000

Preferred Stock = 1,000 x 100=100,000

Paid-in Capital in Excess of Par-Preferred Stock = 1,000 x 9=9,000

B) Post to the stockholders’ equity accounts. (Post entries in the order of journal entries presented in the previous part.)

Preferred Stock

 Date Debt Credit Balance Mar. 1 500,000 500,000 Nov. 1 100,000 600,000

Common Stock

 Date Debt Credit Balance Jan. 10 160,000 160000 Apr. 1 48,000 208,000 May. 1 160,000 368,000 Aug. 1 20,000 388,000 Sept. 1 20,000 408,000

Paid-in Capital in Excess of Par-Preferred Stock

 Date Debt Credit Balance Mar. 1 25,000 25,000 Nov. 1 9,000 34,000

Paid-in Capital in Excess of Stated Value-Common Stock

 Date Debt Credit Balance Jan. 10 160,000 160000 Apr. 1 37000 197,000 May. 1 200,000 397,000 Aug. 1 10,000 407,000 Sept. 1 30,000 437,000

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