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Various Journal Entries 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: 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.

BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 15, Problem 14E
Textbook Problem

Various Journal Entries 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:

  1. 1. Accepts a subscription contract to 7,000 shares of common stock at $42 per share and receives a 30% down payment.
  2. 2. Collects the remaining balance of the subscription contract and issues the common stock.
  3. 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. 4. Sells 1,000 shares of common stock at $47 per share.
  5. 5. Sells 900 shares of preferred stock at $112 per share.
  6. 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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Chapter 15 Solutions

Intermediate Accounting: Reporting And Analysis
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