PE 13-2B Entries for issuing stock

On January 22, Zentric Corporation issued for cash 180,000 shares of no-par common stock at $4. On February 14, Zentric Corporation issued at par value 44,000 shares of preferred 2% stock, $55 par for cash. On August 30, Zentric Corporation issued for cash 9,000 shares of preferred 2% stock, $55 par at $60.

Journalize the entries to record the January 22, February 14, and August 30 transactions.


Answer:


Jan. 22 Cash 720,000
Common Stock (180,000 shares × $4) 720,000
Feb. 14 Cash 2,420,000
Preferred Stock (44,000 shares × $55) 2,420,000
Aug. 30 Cash (9,000 shares × $60) 540,000
Preferred Stock (9,000 shares × $55) 495,000
Paid-In Capital in Excess of Par—
Preferred Stock [9,000 shares × ($60 – $55)] 45,000