Irwin Corporation has been authorized to isue 20,000 shares of $100 par value, 10% preferred stock and 1,000,000 shares of no-par common stock. The corporation assigned a $2,50 stated value to the common stock. At December 31, 2020, the ledger contained the following balances pertaining to stockholders equity.
| Preferred Stock | $120,000 |
| Paid-in Capital in Excess of Par-Preferred Stock | 20,000 |
| Common Stock | 1,000,000 |
| Paid-in Capital in Excess of Stated Value-Common Stock | 1,800,000 |
| Treasury Stock (1,000 common shares) | 11,000 |
| Paid-in Capital from Treasury Stock | 1,500 |
| Retained Earnings | 82,000 |
The preferred stock was issued for land having a fair value of $140,000. All common stock issued was for cash. In November, 1,500 shares of common stock were purchased for treasury at per shares cost of $11. In December, 500 shares of treasury stock were sold for $14 per shares. No dividends were declared in 2020
Instruction
- prepare the journal entries for the
- Issuance of preferred stock for land.
- Issuance of common stock for cash
- Purchase of common treasury stock for cash.
- Sale of treasury stock for cash
- Prepare the stockholders' equity section at December 31, 2020.
Solution
a.
Irwin Corporation
Journal Entries
Journal Entries
b.
Irwin Corporation
Balance Sheet (Partial)
December 31, 2020
Balance Sheet (Partial)
December 31, 2020
