Question

Exercise 15-08 Buffalo 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. Date Account Titles and Explanation Debit Credit May 2 Cash 204,000    Capital Stock 204,000 (Issued 12,000 shares of $5 par value common stock at $17 per share) May 10 Cash 800,000    Capital Stock 800,000 (Issued 10,000 shares of $40 par value preferred stock at $80 per share) May 15 Capital Stock 14,400    Cash 14,400 (Purchased 900 shares of common stock for the treasury at $16 per share) May 31 Cash 11,200    Capital Stock 5,600    Gain on Sale of Stock 5,600 (Sold 560 shares of treasury stock at $20 per share) On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit May 2May 10May 15May 31 May 2May 10May 15May 31 May 2May 10May 15May 31 May 2May 10May 15May 31 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Question Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER

Answer 1

Date	Account Titles and Explanation	Debit	Credit
May 2	Cash	204000
	Common Stock		60000	=12000*5
	Paid in Capital in excess of par-Common Stock		144000
May 10	Cash	800000
	Preferred Stock		400000	=10000*40
	Paid in Capital in excess of par-Preferred Stock		400000
May 15	Treasury Stock	14400
	Cash		14400
May 31	Cash	11200
	Treasury Stock		8960	=560*16
	Paid-in Capital from Treasury Stock		2240