Lodi Company is authorized to issue 100,000 shares of no-par, $6 stated-value common stock and 10,000 shares of 9%, $100 par preferred stock. It enters into the following transactions on December 31:1.Accepts a subscription contract to 7,000 shares of common stock at $42 per share and receives a 30% down payment.2.Collects the remaining balance of the subscription contract and issues the common stock.3.Acquires a building by paying $3,000 cash and issuing 3,000 shares of common stock and 900 shares of preferred stock. Common stock is currently selling at $46 per share; preferred stock has no current market value. The building is appraised at $225,000.4.Sells 1,000 shares of common stock at $47 per share.5.Sells 900 shares of preferred stock at $112 per share.6.Declares a three-for-one stock split on the common stock, reducing the stated value to $2.00 per share. Required: Prepare memorandum and journal entries to record the preceding transactions.

Step 1 Journal is the part of book keeping.

Answered: Lodi Company is authorized to issue…

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

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 5MC: Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of 10 par...

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Lodi Company is authorized to issue 100,000 shares of no-par, $6 stated-value common stock and 10,000 shares of 9%, $100 par preferred stock. It enters into the following transactions on December 31:

1.	Accepts a subscription contract to 7,000 shares of common stock at $42 per share and receives a 30% down payment.
2.	Collects the remaining balance of the subscription contract and issues the common stock.
3.	Acquires a building by paying $3,000 cash and issuing 3,000 shares of common stock and 900 shares of preferred stock. Common stock is currently selling at $46 per share; preferred stock has no current market value. The building is appraised at $225,000.
4.	Sells 1,000 shares of common stock at $47 per share.
5.	Sells 900 shares of preferred stock at $112 per share.
6.	Declares a three-for-one stock split on the common stock, reducing the stated value to $2.00 per share.

Required:

Prepare memorandum and journal entries to record the preceding transactions.

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