Exercise
Wildhorse Inc. recently hired a new accountant with extensive experience in accounting for partnerships.
Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting.
During the first month, he made the following entries for the corporation's capital stock.
On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions.
(Credit account titles are automatically indented when amount is entered.
Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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Date
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Account Titles and Explanation
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Debit
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Credit
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May 2
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Cash
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192,000
|
|
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Capital Stock
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192,000
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(Issued 12,000 shares of $5 par value common stock at $16 per share)
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|
|
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May 10
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Cash
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800,000
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|
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Capital Stock
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800,000
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(Issued 10,000 shares of $40 par value preferred stock at $80 per share)
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|
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May 15
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Capital Stock
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18,000
|
|
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Cash
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18,000
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(Purchased 1,200 shares of common stock for the treasury at $15 per share)
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|
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May 31
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Cash
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11,220
|
|
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Capital Stock
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6,600
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Gain on Sale of Stock
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4,620
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(Sold 660 shares of treasury stock at $17 per share)
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|
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Date
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Account Titles and Explanation
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Debit
|
Credit
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