Question

Check my work Exercise 8-7 Recording and reporting common and preferred stock transactions LO 8-3 Eastport Inc. was organized on June 5, 2018. It was authorized to issue 330,000 shares of $9 par common stock and 35,000 shares of 5 percent cumulative class A preferred stock. The class A stock had a stated value of $25 per share. The following stock transactions pertain to Eastport Inc.: 1. Issued 20,000 shares of common stock for $14 per share. 2. Issued 15,000 shares of the class A preferred stock for $30 per share. 3. Issued 59,000 shares of common stock for $17 per share. Required: Prepare the stockholders' equity section of the balance sheet immediately after these transactions have been recognized EASTPORTINC Balance Sheet(partial) For the Year Ended 2018 Stockholders' Equity < Prey 2 of 7 !!! Next > PHILIPS

Answer 1

Solution:

Journal Entries
Particulars	Debit	Credit
Cash (20,000 * $14)	280,000
Common stock (20,000 * $9)		180,000
Additional paid-in capital - Common stock		100,000
Cash (15,000 * $30)	450,000
Preferred stock (15,000 * $25)		375,000
Additional paid-in capital - Preferred stock		75,000
Cash (59,000 * $17)	1,003,000
Common stock (59,000 * $9)		531,000
Additional paid-in capital - Common stock		472,000

Balance sheet (Partial)
Stockholder's Equity:
Capital stock:
Cumulative Class A preferred stock (5 percent, $25 stated value,		375,000
35,000 shares authorized, 15,000 issued shares and outstanding)
Common stock ($9 par value, 330,000 authorized shares , 79,000		711000
shares issued and outstanding,)
Total capital stock		1,086,000
Additional paid-in capital:
In excess of par value - Preferred stock	375,000
In excess of par value - Common stock	572,000
Total additional paid-in capital		947,000
Total paid-in capital		2,033,000