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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