Asked by Samantha DiJohn on May 08, 2024
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R. Red formed a corporation with an authorization of 20,000 shares of $50 par, 6% non-cumulative preferred stock and 100,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations. Journalize the transactions omitting explanations.
Jan 10 Issued 20,000 shares of common stock at par for cash.
31 Issued 20,000 shares of common stock in exchange for land, buildings, and
equipment with fair market prices of $52,000, $125,000, and $48,000, respectively.
Feb 24 Issued 2,000 shares of preferred stock at $54 for cash.
Non-cumulative Preferred Stock
A type of preferred stock where dividends are not accumulated if they are not declared.
Par Value
The nominal or face value of a stock or security at issuance, which may not reflect its actual market value.
Common Stock
A type of equity security that represents ownership in a corporation, with holders typically having voting rights and entitlement to dividends.
- Understand the process of issuing common and preferred stock for cash and non-cash considerations.
- Journalize stock transactions, including issuance for cash, exchange for assets, and stock subscriptions.
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IN
Learning Objectives
- Understand the process of issuing common and preferred stock for cash and non-cash considerations.
- Journalize stock transactions, including issuance for cash, exchange for assets, and stock subscriptions.