Problem 154 Coronado Corporations charter authorized issuanc

Problem 15-4

Coronado Corporation’s charter authorized issuance of 100,000 shares of $10 par value common stock and 53,400 shares of $50 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent of the others.

Record the transactions listed above in journal entry form. (Round Round intermediate calculations to 6 decimal places, e.g. 0.546872 and final answers to 0 decimal places, e.g. $38,487. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts.)

No.

Account Titles and Explanation

Debit

Credit

1.		Issued a $9,500, 9% bond payable at par and gave as a bonus one share of preferred stock, which at that time was selling for $103 a share.
2.		Issued 480 shares of common stock for equipment. The equipment had been appraised at $7,100; the seller’s book value was $6,700. The most recent market price of the common stock is $15 a share.
3.		Issued 358 shares of common and 90 shares of preferred for a lump sum amounting to $10,200. The common had been selling at $13 and the preferred at $60.
4.		Issued 220 shares of common and 51 shares of preferred for equipment. The common had a fair value of $15 per share; the equipment has a fair value of $6,000.

Solution

No Account Titles and Explaination Debit Credit 1 Cash     9,500.00 Dicount on bond issued        103.00 Bond Payable 9,500.00 Preferred stock par value         50.00 Additional paid in Capital/Share premium         53.00 (Being Cash received on issue of bonds at discount in form issuing one preferred stock as bonus at premium) 2 Equipment(480*15)     7,200.00 Common stock par value(480*10) 4,800.00 Additional paid in capital(7200-4800) 2,400.00 (Being euipment purchased on market value by issue of shares) 3 Cash 10,200.00 Common Stock(k) 3,631.99 Addditional paid in capital common stock(l) 1,089.60 Preferred Stock(k) 4,565.35 Addditional paid in capital preferred stock(l)       913.07 (Being shares issued recorded based on FV) 4 Equipment     6,000.00 Common stock par value(220*10) 2,200.00 Additional paid in capital common stock(3300-2200) 1,100.00 Preferred stock par value(51*50) 2,550.00 Additional paid in capital Preferred stock(2700-2550)       150.00 (Being equipment purchased by issuing shares at FV) Working for 3rd Journal Calculation of fair value of stock No of shares(a) Rate per share(b) Value(c = a*b) Proportion to FV(d) Value to be recognised in journal(e=10200*d%) Par Value(f=a*par value) Additional paid in capital(g = c-f) Proportion of additional paid in capital on share value(j = g/f*100) Allocating additional paid in capital % to value to be recognised in journal(k = e/(100+j)%) Additional paid in capital to be recognised in journal(l = e-k) Common stock               358.00                 13.00           4,654.00                 46.29           4,721.58           3,580.00           1,074.00                 30.00           3,631.99           1,089.60 Preferred stock                 90.00                 60.00           5,400.00                 53.71           5,478.42           4,500.00               900.00                 20.00           4,565.35               913.07 Total FV         10,054.00               100.00         10,200.00           8,080.00           1,974.00           8,197.33           2,002.67 Working for 4th Journal Particulars Amount Fair value of Equipment           6,000.00 Less: FV of common stock          -3,300.00 Balance - Preferred Stock           2,700.00