BUSINESS AND FINANCE

Brief Exercise 13-5

Lei Inc.’s $11 par value common stock is actively traded at a market price of $16 per share. Lei issue 4,900 shares to purchase land advertised for sale at $74,980. Journalize the issuance of the stock in acquiring the land. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 

Account titles and explanation Debt Credit
Land 74,800  
Common stock   53900
Paid-in Capital in Excess of Par-Common Stock   24,500

 

Cash = 74,980

Common Stock = 4,900 x 11 = 53900

Paid-in Capital in Excess of Par-Common Stock = 4,900 x 6(16-11) = 24,500

 

Brief Exercise 13-6

On July 1, Raney Corporation purchases 590 shares of its $6 par value common stock for the treasury at a cash price of $9 per share. On September 1, it sells 300 shares of the treasury stock for cash at $13 per share.

 

Journalize the two treasury stock transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 

July 1

Account titles and explanation Debt Credit
Treasury stock 5310  
Cash   5310

Treasury stock = 590 x 9 =5,310

 

September 1

Account titles and explanation Debt Credit
Cash 3,900  
Treasury stock   2700
Paid-in Capital from Treasury Stock   1200

Cash = 300 x 13 = 3,900

Treasury Stock = 300 x 9 = 2,700

Paid-in Capital from Treasury Stock = 300 x 4(13-9) =1200

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