Purpose: (L.O. 2, 4, 7) This exercise will illustrate how to record selected transactions related to the issuance of capital stock.
On March 1, 2014, Aladdin Corporation received authorization to issue 400,000 shares of $10 par value common stock and 100,000 shares of $50 par value 6% preferred stock. The following transactions occurred during 2014:
|March 24||Issued 100,000 shares of common stock for cash at a price of $22 per share.|
|March 28||Issued 50,000 shares of common stock in exchange for a group of modular warehouses.|
|June 5||Sold 20,000 shares of preferred stock at $52 each.|
(a) Prepare the journal entries to record the transactions listed above.
(b) Assuming no other stock transactions occurred during 2014, prepare the stockholders' equity section of the balance sheet at December 31, 2014. Assume the balance of the Retained Earnings account is $820,000 at the balance sheet date.