Steger Corporation was organized on July 15, Year 1. The company was authorized to issue 150,000 shares of $5 par value common stock and 50,000 shares of 9% cumulative class A preferred stock. The class A preferred stock had a stated value of $10 per share. Steger entered into the following stock transactions:a) Issued 50,000 shares of common stock for $22 per shareb) Issued 4,000 shares of the class A preferred stock for $20 per sharec) Issued 27,500 shares of common stock for $28 per shareRequired:Prepare the general journal entries required for these transactions.
What will be an ideal response?
a)
Common stock = 50,000 shares × Par value of $5 = $250,000
Paid-in capital in excess of par value-common = 50,000 shares × (Issue price of $22 per share ? Par value of $5 per share) = $850,000
b)
Preferred stock = 4,000 shares × Par value of $10 = $40,000
Paid-in capital in excess of par value-preferred = 4,000 shares × (Issue price of $20 per share ? Par value of $10 per share) = $40,000
c)
Common stock = 27,500 shares × Par value of $5 = $137,500
Paid-in capital in excess of par value-common = 27,500 shares × (Issue price of $28 per share ? Par value of $5 per share) = $632,500
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