Question

Prepare the journal entries for Mayhem Manufacturing:

June 10 Incurred organization costs totaling $7,500
June 14 Issued 10,000 shares of $11 par value common stock for $120,000
June 22 Issued 3,000 shares of 7%, $30 par value preferred stock for $120,000

Answer 1

Organization Expenses Dr 7,500
Cash 7,500

June 14 Cash Dr 120,000
Common Stock 110,000
Paid-In Capital in Excess of par value—Common 10,000

June 22 Cash Dr 120,000
Preferred Stock 90,000
Paid-In Capital in Excess of par value—Preferred 30,000