BUSINESS AND FINANCE

Exercise 13-3

During its first year of operations, Foyle Corporation had the following transactions pertaining to its common stock.

 

Jan. 10 Issued 66,400 shares for cash at $6 per share.

July. 1 Issued 42,500 shares for cash at $8 per share

 

A) Journalize the transactions, assuming that the common stock has a par value of $6 per share. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 

 

Jan. 10

Account titles and explanation Debt Credit
Cash 398,400  
Common Stock   398,400

 

Cash = 66,400 x 6 = 398,400

 

 

 

July 1

Account titles and explanation Debt Credit
Cash 340,000  
Common Stock   255,000
Paid-in Capital in Excess of Par-Common Stock    

85,000

 

 

Cash = 42,500 x 8= 340,000

Common Stock = 42,500 x 6 = 255,000

Paid-in Capital in Excess of Par-Common Stock = 42,500 x 2(8-6) =85,000

 

 

B) Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 

Jan. 10

Account titles and explanation Debt Credit
Cash 398,400  
Common Stock   66400
Paid-in Capital in Excess of Stated Value-Common Stock    

332000

 

Cash = 66,400 x 6 = 398,400

Common Stock = 66,400 x 1 = 66,400

Paid-in Capital in Excess of Stated Value-Common Stock = 66,400 x 5(6-1) = 332000

 

 

Jul. 1

Account titles and explanation Debt Credit
Cash 340,000  
Common Stock   42,500
Paid-in Capital in Excess of Stated Value-Common Stock    

29,7500

 

Cash = 42,500 x 8= 340,000

Common Stock = 42,500 x 1 = 42,500

Paid-in Capital in Excess of Stated Value-Common Stock = 42,500 x 7(8-1) = 29,7500

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