In 2017 the Hicklien Corporation was formed The corporate ch

In 2017, the Hicklien Corporation was formed. The corporate charter authorizes the issuance of 10,000,000 shares of $1 par value common stock, and 4,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock.      The following selected transactions took place in 2017:

>1,200,000 shares of common stock were issued for cash.   The market price of the stock was $10 per shares.

>25,000 shares of common stock were issued for land.   The asking price of the land was $270,000.   The fair value of the land was $239,500.

>200,000 shares of preferred stock were issued for cash. The market price of the stock was $95.

>10,000 shares of common stock were issued to attorneys in payment of their bill for $35,000 of services performed during the company’s organization.

>5,000 shares of preferred stock were issued for cash.   The market price of the stock was $100

>15,000 shares of preferred stock were issued for machinery and equipment.   The fair value of the machinery and equipment was $1,650,000.   The stock was selling in the market at $102 per share.

INSTRUCTIONS:

JOURNALIZE the 2017 transactions above in general journal form.

Solution

Journalize the transaction in 2017 date Account titles & explanation Debit Credit 1,200,000 shares of common stock were issued for cash.   The market price of the stock was $10 per shares. 1 Cash A/c (1,200,000*$10) $12,000,000      To common stock (1200,000*$1) $1200,000       To paid in capital inexcess of par value - common Stock $10,800,000 (being Common stock Issued for cash has been recorded) 2 25,000 shares of common stock were issued for land.   The asking price of the land was $270,000.   The fair value of the land was $239,500. land A/c $239,500      To common stock (25000*$1) $25000       To paid in capital inexcess of par value - common Stock $214,500 (being Common stock Issued in exchage of land has been recorded) 3 200,000 shares of preferred stock were issued for cash. The market price of the stock was $95 cash A/c (200,000*$95) $19,000,000       To preferred Stock A/c (200,000*$5) $1000,000       To paid in capital inexcess of par value - Preferred Stock $18,000,000 (being Preferred stock Issued for cash has been recorded) 4 10,000 shares of common stock were issued to attorneys in payment of their bill for $35,000 of services performed during the company’s organization organization Expenses A/c $35000        To Common Stock A/c (10,000*$1) $10,000       To paid in capital inexcess of par value - common Stock $25000 (being Common stock issued for bill payable has been recorded) 5 5,000 shares of preferred stock were issued for cash.   The market price of the stock was $100 cash A/c (5,000*$100) $500,000       To preferred Stock A/c (5,000*$5) $25000       To paid in capital inexcess of par value - Preferred Stock $475,000 (being Preferred stock Issued for cash has been recorded) 6 15,000 shares of preferred stock were issued for machinery and equipment.   The fair value of the machinery and equipment was $1,650,000. Machinery & Equipment A/c $1650,000         To preferred Stock (15000*$5) $75000       To paid in capital inexcess of par value - Preferred Stock $1575,000 (being prefered Stock issued in exchange of machinery & Equipment has been recorded)