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Horngren'S Financial And Managerial Accounting
Found in: Page 722

Short Answer

Question: Identifying sources of equity, stock issuance, and dividends

Tillman Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2018:

Preferred Stock—5%, ? Par Value; 625,000 shares

authorized, 325,000 shares issued and outstanding

Paid-In Capital:

$ 1,300,000


Stockholders’ Equity

Paid-In Capital in Excess of Par—Common 2,600,000

Total Paid-In Capital 5,250,000

Retained Earnings 11,800,000

Total Stockholders’ Equity $ 17,050,000

Common Stock—$1 Par Value; 7,000,000 shares

authorized, 1,350,000 shares issued and outstanding


3. Make two summary journal entries to record issuance of all the Tillman Comfort Specialists stock for cash. Explanations are not required.


Cash will be debited, and preferred stock will be credited by $1,300,000.

Cash will be debited, and common stock will be credited by $1,350,000

See the step by step solution

Step by Step Solution

Step 1: Basic Introduction

The issue of shares is the process in which corporations allocate new shares to the stockholders (individuals or corporations) through initial and further offer in recognize stock exchange.

Step 2: Journal entry to issuance of stock







Preferred Stock


Cash ($1 * 1,350,000)


Common Stock


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