Buttercup Corporation issued 300 shares of $10 par value common stock for $4,500. Prepare Buttercup’s journal entry.
In Buttercup Corporation's book, cash is debited.
Common stock and paid-in capital in excess of par common stock are credited.
The term "common stock" refers to a type of security that represents a corporation's ownership. Common investors elect the board of directors, and they also have a say in business decisions.
To common Stock (300 x $10)
To paid-in capital in excess of
par common stock
(being share issued at par)
Pistons Inc. recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, he made the following entries for the corporation’s capital stock.
(Issued 12,000 shares of $5 par value common stock at $16 per share)
(Issued 10,000 shares of $30 par value preferred stock at $60 per share)
(Purchased 1,000 shares of common stock for the treasury at $15 per share)
Gain on Sale of Stock
(Sold 500 shares of treasury stock at $17 per share)
On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions.
Cole Inc. owns shares of Marlin Corporation stock. At December 31, 2017, the securities were carried in Cole’s accounting records at their cost of $875,000, which equals their fair value. On September 21, 2018, when the fair value of the securities was $1,200,000, Cole declared a property dividend whereby the Marlin securities are to be distributed on October 23, 2018, to stockholders of record on October 8, 2018. Prepare all journal entries necessary on those three dates.
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