Question

Q&A from Online Tutors - Course Hero (2) Facebook Question 2 Not yet answered Points out of 25.00 Flag question Franklin Corporation was authorized to issue 5,000 shares $100 par value, 9% preferred stock and 50,000 share of $5 par common stock. Record the following transactions: • Issued 10,000 shares of common stock for $12 per share • Issued 500 shares of common stock at $11 per share for services rendered in connection with the organization of the company Issued 2,500 shares of common stock for land on which the asking price was $35,000. Market value of the stock was $12. Management wishes to record the land at the market price of the stock. • Declared a cash dividend of $.50 per share on the common stock Date of record • Paid the cash dividend • Issued 1,000 shares of Preferred stock at $110 per share . B 1 : 2 U X2 x E 3

Answer 1

1. Journal Entries -

Date Credit Frankline Corporation Journal Entries Accounts Title Cash Common Stock Paid in Capital in Excess of Par - Common Stock (Being Common Stock Issued) Debit $120,000 1 $ 50,000 $ 70,000 2 Organisation Cost $ 5,500 Common Stock Paid in Capital in Excess of Par - Common Stock (Being Organisation cost paid through stock issue) $ 2,500 $ 3,000 3 Land $ 35,000 Common Stock Paid in Capital in Excess of Par - Common Stock (Being Land Purchased & Common Stock Issued) $ 12,500 $ 22,500 4 $ 6,500 Dividend Dividend Payable (Being Dividend Declared) $ 6,500 5 No Entry 6 $ 6,500 Dividend Payable Cash $ 6,500 (Being Dividend Paid) 7 Cash Preferred Stock Paid in Capital in Excess of Par - Preferred Stock (Being Common Stock Issued) $110,000 $100,000 $ 10,000