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Homework answers / question archive / XYZ Corporation is authorized to issue 1,000,000 shares of $5 par value common stock
XYZ Corporation is authorized to issue 1,000,000 shares of $5 par value common stock. In its first year, the company has the following stock transactions.
Jan. 10 Issued 400,000 shares of stock at $5 per share.
July. 1 Issued 100,000 shares of stock for land. The land had an asking price of $800,000.
The stock is currently selling on a national exchange at $8.25 per share.
Sept. 1 Purchased 10,000 shares of common stock for the treasury at $9 per share.
Dec. 1 Sold 4,000 shares of the treasury stock at $10 per share.
Instructions: Journalize the transactions above.
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| Journal | |||||||
| Date | Particulars | Debit | Credit | Calculations | |||
| Jan-10 | Cash | Dr | 2,000,000 | 400,000 x 5 | |||
| To | Common Stock | 2,000,000 | |||||
| (Being issue of 400,000 shares of stock at par) | |||||||
| Jul-01 | Land | Dr | 850,000 | Balance | |||
| To | Common Stock | 500,000 | 100,000 x 5 | ||||
| To | Additional Paid-In Capital | 350,000 | 100,000 x (8.5 - 5) | ||||
| (Being stock issued at excess of par for purchase | |||||||
| of Land) | |||||||
| Sep-01 | Treasury Stock | Dr | 90,000 | 10,000 x 9 | |||
| To | Cash | 90,000 | |||||
| (Being 10,000 shares of treasury stock purchased) | |||||||
| Dec-01 | Cash | Dr | 40,000 | 4,000 x 10 | |||
| To | Treasury Stock | 36,000 | 4,000 x 9 | ||||
| To | Additional Paid-In Capital | 4,000 | Balance | ||||
| (Being 4,000 shares of treasury stock sold for gain) | |||||||
