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Riverbed Corporation was organized on January 1, 2020. It is authorized to issue 14,500 shares of 8%, $100 par value preferred stock, and 475,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 84,500 shares of common stock for cash at $4 per share.
Mar. 1 Issued 4,050 shares of preferred stock for cash at $110 per share.
Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $88,500. The fair value of the land was $83,500.
May 1 Issued 83,000 shares of common stock for cash at $5.25 per share.
Aug. 1 Issued 12,000 shares of common stock to attorneys in payment of their bill of $40,500 for services performed in helping the company organize.
Sept. 1 Issued 11,500 shares of common stock for cash at $5 per share.
Nov. 1 Issued 2,500 shares of preferred stock for cash at $111 per share

Required:
Journalize the transactions.

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Answer:

Jan. 10

Cash $338,000 (debit)

Common Stock $338,000 (credit)

Mar. 1

Cash $445,500 (debit)

Common Stock $445,500 (credit)

Apr. 1

Land $88,500 (debit)

Common Stock $88,500 (credit)

May 1

Cash $435,750 (debit)

Common Stock $435,750 (credit)

Aug 1

Organizing Costs : attorneys $40,500 (debit)

Common Stock $40,500 (credit)

Sept. 1

Cash $57,500 (debit)

Common Stock $57,500 (credit)

Nov. 1

Cash (debit) $277,500

Share Premium ; Preference Stock (credit) $27,500

Preference Stock (credit) $250,000

Explanation:

The Common Stocks are classified as no-par common stock. This means there is no premium account recognized for this classification of stock. The stocks will be presented at their  respective value at date of issuance.

With the Preference Stock, this is different. A par value of $100 has been established. Any payment made in excess of the par value will end up in Share Premium Account.

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