On April 1, 11,000 shares of $6 par common stock were issued at $26, and on April 7, 3,000 shares of $60 par preferred stock were issued at $108. Journalize the entries for April 1 and 7. If an amount box does not require an entry, leave it blank.

April 1: Debit Cash - 286,000; Credit Common stock 66,000 and PICIEP 220,000

April 7: Debit Cash - 324,000 Credit Preferred Stock 180,000 and PICIEP 144,000

Explanation:

The question is to journalize the issue of shares both Common Stock on April 1 and Preferred Stock on April 7

April 1: Common Stock Issue

Cash = 11,000 shares x $26 = $286,000

Common Stock = 11,000 shares x $6 = $66,000

Paid in Capital in Excess of Par = $286,000 - $66,000 = $220,000

Journal Entries are as follows

Date          Description          Debit         Credit

April 1           Cash                286,000

                 Common Stock                       66,000

                PICIEP                                       220,000

April 7: Preferred Stock Issue

Cash = 3,000 shares x $108 = $324,000

Preferred Stock = 3,000 shares x $60 = $180,000

Paid in Capital in Excess of Par = $324,000- $180,000= $144,000

Journal Entries are as follows

Date          Description          Debit         Credit

April 7           Cash                324,000

                 Peferred Stock                       180,000

                PICIEP                                       144,000

The journal entries to record issue of common stock are as follows:

Dr  Cash                                                                       $286,000

Cr Common stock($6*11000)                                                         $66000

Cr Capital paid-in excess of par value($20*11000)                       $220,000

Being issue of common stock at $26 per share

The journal entries for the issue of preferred stock are :

Dr   Cash                                                                      $324,000

Cr Preferred Stock ($60*3000)                                                    $180,000

Cr Capital paid-in excess of par value($108-$60)*3000            $144,000

Being issue of preferred stock at $108 per share

Explanation:

Upon issuance of common stock, cash proceeds of $286000   ($26*11000) were realized which signals an increase in cash of the same amount, the journal entries for that issue is as follows:

Dr  Cash                                                                       $286,000

Cr Common stock($6*11000)                                                         $66000

Cr Capital paid-in excess of par value($26-$20)*11000              $220,000

However, cash proceeds realized from issue of preferred stock is  $324000  ($108*3000) and the necessary journal entries are as follows:

Dr   Cash                                                                      $324,000

Cr Preferred Stock ($60*3000)                                                    $180,000

Cr Capital paid-in excess of par value($108-$60)*3000            $144,000

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