Question
Asked Feb 9, 2020
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Bonita Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $124,000.

(a)   Prepare the journal entry for the issuance when the market price of the common shares is $176 each and market price of the preferred is $220 each.
(b)   Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $218 per share.
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Expert Answer

Step 1: (a) Prepare the journal entry.

Calculate the total allocation.

Accounting homework question answer, step 1, image 1

Journal entry:

Accounting homework question answer, step 1, image 2

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