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Stellar Corporation was organized on January 1, 2020. It is authorized to issue 9,100 shares of 8%, $100 par value preferred stock, and 525,800 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 80,170 shares of common stock for cash at $6 per share.
Mar. 1 Issued 5,410 shares of preferred stock for cash at $112 per share.
Apr. 1 Issued 24,730 shares of common stock for land. The asking price of the land was $91,570; the fair value of the land was $80,170.
May 1 Issued 80,170 shares of common stock for cash at $9 per share.
Aug. 1 Issued 9,100 shares of common stock to attorneys in payment of their bill of $50,100 for services rendered in helping the company organize.
Sept. 1 Issued 9,100 shares of common stock for cash at $11 per share.
Nov. 1 Issued 1,010 shares of preferred stock for cash at $106 per share.

Required:
Prepare the journal entries to record the above transactions.

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Answer:

Jan-10

Dr Cash $ 481,020

Cr Common stock $ 80,170

Cr Additional paid in capital in excess of stated value - Common stock $ 400,850

Mar-01

Dr Cash $ 605,920

Cr Preferred stock $ 541,000

Cr Additional paid in capital in excess of par value - Preferred stock $ 64,920

Apr-01

Dr Land $ 80,170

Cr Common stock $ 24,730

Cr Additional paid in capital in excess of stated value - Common stock $55,440

May-01

Dr Cash $ 721,530

Cr Common stock $ 80,170

Cr Additional paid in capital in excess of stated value - Common stock $ 641,360

Aug-01

Dr Incorporation charges / Legal charges $ 50,100

Cr Common stock $ 9,100

Cr Additional paid in capital in excess of stated value - Common stock $ 41,000

Sep-01

Dr Cash $ 100,100

Cr Common stock $ 9,100

Cr Additional paid in capital in excess of stated value - Common stock $ 91,000

Nov-01

Dr Cash $ 107, 060

Cr Preferred stock $ 101,000

Cr Additional paid in capital in excess of par value - Preferred stock $ 6,060

Explanation:

Preparation of Journal entries

Jan-10

Dr Cash (80,170 * $6) $ 481,020

Cr Common stock (80,170*$1) $ 80,170

Cr Additional paid in capital in excess of stated value - Common stock $ 400,850

(481,020-80,170)

Mar-01

Dr Cash (5,410*$112) $ 605,920

Cr Preferred stock (5,410*$100) $ 541,000

Cr Additional paid in capital in excess of par value - Preferred stock $ 64,920

(605,920-541,000)

Apr-01

Dr Land $ 80,170

Cr Common stock (24,730*$1) $ 24,730

Cr Additional paid in capital in excess of stated value - Common stock $55,440

(80,170-24,730)

May-01

Dr Cash (80,170 * $9) $ 721,530

Cr Common stock (80,170*$1) $ 80,170

Cr Additional paid in capital in excess of stated value - Common stock $ 641,360

(721,530-80,170)

Aug-01

Dr Incorporation charges / Legal charges $ 50,100

Cr Common stock (9,100*$1) $ 9,100

Cr Additional paid in capital in excess of stated value - Common stock $ 41,000

(50,100-9,100)

Sep-01

Dr Cash (9,100 * $11) $ 100,100

Cr Common stock (9,100*$1) $ 9,100

Cr Additional paid in capital in excess of stated value - Common stock $ 91,000

(100,100-9,100)

Nov-01

Dr Cash (1,010*$106) $ 107, 060

Cr Preferred stock (1,010*$100) $ 101,000

Cr Additional paid in capital in excess of par value - Preferred stock $ 6,060

(107,060-101,000)