Chapter 10, Problem 16AE

Issuing stock (Learning Objectives 3 & 7) 10-15 min.

The charter for Zelkin, Inc., authorizes the company to issue 200,000 shares of $3, no-par preferred stock and 900,000 shares of common stock with $1 par value. During its start-up phase, Zelkin, Inc., completed the following transactions:

2018
Apr 6	Issued 250 shares of common stock to the promoters who organized the corporation, receiving cash of $8,500.
12	Issued 550 shares of preferred stock for cash of $28,000.
14	Issued 1,100 shares of common stock in exchange for land with a market value of $23,000.

Requirements

1. 1. Record the transactions in the journal.
2. 2. Prepare the stockholders’ equity section of Zelkin's balance sheet at December 31, 2018. Assume the company earned net income of $38,000 during this period.