Question

Prepare journal entries to record the following transactions for Kenley in for the third quarter of 2019.

Kenley Inc. was organized and authorized to issue 5,000 shares of $50 par value, 7% percent preferred stock and 100,000 shares of $5 par value common stock on July 1, 2019.

July 1   Issued 10,000 shares of common stock at $11 per share

July 1   Issued 200 shares of common stock at $12 per share for services rendered in connection with the organization of the company

July2    Issued 1,000 shares of preferred stock at par value for cash

July 10 Issued 5,000 shares of common stock for land on which the asking price was $95,000. Market value of the stock was $15. Management wishes to record the land at full market value of the stock.

Aug 10 Declared a cash dividend of $0.02 per share on common stock outstanding, payable on Aug 22 to stockholders of record on Aug 12.

Aug 12 Date of record for cash dividends

Aug 22 Paid cash dividends

Sept 15 Issued another 1,000 shares of preferred stock but at $60 per share.

Answer 1

	Answer
Date	Account title and explanation	Debit	Credit
Jun-01	Cash (10000*11)	$1,10,000
	Common stock (10000*5)		$50,000
	Paid-in capital in excess of par- Common stock		$60,000
	(To record issuance of common stock)
Jun-01	Organization expense (200*12)	$     2,400
	Common stock (200*5)		$ 1,000
	Paid-in capital in excess of par- Common stock		$ 1,400
	(To record issuance of common stock against for services rendered)
Jun-02	Cash (1000*50)	$   50,000
	Preferred stock		$50,000
	(To record issuance of preferred stock for cash)
Jun-10	Land (5000*15)	$   75,000
	Common stock (5000*5)		$25,000
	Paid-in capital in excess of par- Common stock		$50,000
	(To record issuance of common stock for land)
Aug-10	Cash dividend (10000+200+5000) * 0.02	$      304
	Dividend Payable		$    304
	(To records Dividend payable)
Aug-12	No Entry required for record date
Aug-22	Dividend Payable	$      304
	Cash		$    304
	(To records Dividend paid)
Jun-02	Cash (1000*60)	$   60,000
	Preferred stock (1000*50)		$50,000
	Paid-in capital in excess of par- Preferred stock		$10,000
	(To record issuance of preferred stock for cash)