Beauty Island Corporation began operations on April 1 by issuing 60,000 shares of $5 par value common stock for cash at $13 per share. On April 19, it issued 2,000 shares of common stock to attorneys in settlement of their bill of $27,500 for organization costs. In addition, Beauty Island issued 1,000 shares of $1 par value preferred stock for $6 cash per share.Journalize the issuance of the common and preferred shares, assuming the shares are not publicly traded. (Record journal entries in the order presented in the problem.)

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aquialaska aquialaska · Answer 1 · 2020-05-13T03:50:59+02:00

Answer and Explanation:

The Journal entry is shown below:-

1. Cash Dr, $780,000

(60,000 × $13)

Common Stock Dr, $300,000

(60,000 × $5)

To Paid-in Capital in Excess of par, Common Stock $1,80,000

(Being issuance of 60,000 shares at $13 per share is recorded)

2. Organization costs Dr, $27,500

To Common Stock $5,000

(1,000 × $5)

To Paid-in Capital in Excess of par, Common Stock $22,500

(Being issuance of 1,000 shares for attorney's fees is recorded)

andromache andromache · Answer 2 · 2021-12-16T10:21:30+01:00

1. Cash Dr, $780,000 (60,000 × $13)

Common Stock Dr, $300,000 (60,000 × $5)

To Paid-in Capital in Excess of par, Common Stock $1,80,000

(Being issuance of 60,000 shares at $13 per share is recorded)

2. Organization costs Dr, $27,500

To Common Stock $5,000 (1,000 × $5)

To Paid-in Capital in Excess of par, Common Stock $22,500

(Being issuance of 1,000 shares for attorney's fees is recorded)

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