Funs Inc. issues 25,000 shares of $1 par value common stock and 25 shares of $1,000 par value, 6% preferred stock to a private investor for $ 1,820, 000. The fair value of the common stock is $71 per share and the fair value of the preferred stock is $1,440 per share. Prepare the journal entry to record the transaction assuming that the fair market values (FMV) for both the common and preferred stock are known. Prepare the journal entry assuming that only the FMV of the common stock is known.

Funs Inc. issues 25,000 shares of $1 par value common stock and 25 shares of $1,000 par value, 6% preferred stock to a private investor for $ 1,820, 000. The fair value of the common stock is $71 per share and the fair value of the preferred stock is $1,440 per share. Prepare the journal entry to record the transaction assuming that the fair market values (FMV) for both the common and preferred stock are known. Prepare the journal entry assuming that only the FMV of the common stock is known.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 4RE: Sun Corporation issues 500 shares of 8 par common stock for a patent. The stock is currently selling...

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Sun Corporation issues 500 shares of 8 par common stock for a patent. The stock is currently selling for 37 per share on the open market, and no significant impact on the market price is expected by the issuance of the additional shares. Prepare the journal entry to record this transaction.
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