Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Q47PGB_3

Expert-verified
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

1,350,000

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

Requirements

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

Answer

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

Date

Transaction

Debit

Credit

Cash

$1,300,000

Preferred Stock

$1,300,000

Cash ($1 * 1,350,000)

$1,350,000

Common Stock

$1,350,000

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.