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13 December, 17:01

Ayayai Corp. was organized on January 1, 2017. It is authorized to issue 19,000 shares of 5%, $50 par value preferred stock and 450,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 65,000 shares of common stock for cash at $4 per share.

Mar. 1 Issued 1,100 shares of preferred stock for cash at $54 per share.

May 1 Issued 110,000 shares of common stock for cash at $5 per share.

Sept. 1 Issued 4,000 shares of common stock for cash at $4 per share.

Nov. 1 Issued 2,000 shares of preferred stock for cash at $54 per share.

Journalize these entries.

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  1. 13 December, 17:23
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    Answer and Explanation:

    The journal entries are shown below:

    On Jan 10

    Cash (65,000 shares * $4) $260,000

    To Common Stock (65,000 shares * $1) $65,000

    To Paid in capital in excess of stated value - Common Stock $195,000

    (Being the issuance of the common stock is recorded)

    On Mar 1

    Cash (1,100 shares * $54) $59,400

    To Preferred stock (1,100 shares * $50) $55,000

    To Paid in capital in excess of par value - Preferred Stock $4,400

    (Being the issuance of the preferred stock is recorded)

    On May 1

    Cash (110,000 shares * $5) $550000

    To Common Stock (110,000 shares * $1) $110,000

    To Paid in capital in excess of stated value - Common Stock $440,000

    (Being the issuance of the common stock is recorded)

    On Sep 1

    Cash (4,000 * $4) $16,000

    To Common Stock (4,000 * $1) $4000

    To Paid in capital in excess of stated value - Common Stock $12,000

    (Being the issuance of the common stock is recorded)

    On Nov 1

    Cash (2,000 shares * $54) $108,000

    To Preferred stock (2,000 shares * $50) $100,000

    To Paid in capital in excess of par value - Preferred Stock $8,000

    (Being the issuance of the preferred stock is recorded)
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