Question

the charter of magnolia corporation authorizes the issuance of 800 shares of preferred stock and 1,800 shares of common stock. during a two - month period, magnolia corporation completed these stock - issuance transactions
requirement 1. record the transactions in the general journal (record debits first, then credits. select the explanation on the last line of the journal entry table.)
mar 23: issued 200 shares of $1 par value common stock for cash of $16 per share
transactions
mar 23 issued 200 shares of $1 par value common stock for cash of $16 per share
apr 12 received inventory with a fair value of $30,000 and equipment with a fair value of $14,000 for 310 shares of the $1 par value common stock
apr 17 issued 800 shares of 5%, $10 par value preferred stock for $10 per share

Explanation:

Step1: Analyze the Mar 23 transaction

• Cash received: \(200\times16 = 3200\) (debit Cash).
• Common Stock (par - value): \(200\times1=200\) (credit Common Stock).
• Paid - in Capital in Excess of Par - Common: \(3200 - 200=3000\) (credit Paid - in Capital in Excess of Par - Common).

Step2: Analyze the Apr 12 transaction

• Inventory (debit) \(30000\), Equipment (debit) \(14000\).
• Common Stock (par - value): \(310\times1 = 310\) (credit Common Stock).
• Paid - in Capital in Excess of Par - Common: \((30000 + 14000)-310=43690\) (credit Paid - in Capital in Excess of Par - Common).

Step3: Analyze the Apr 17 transaction

• Cash received: \(800\times10=8000\) (debit Cash).
• Preferred Stock (par - value): \(800\times10 = 8000\) (credit Preferred Stock).

Answer:

Date	Accounts and Explanation	Debit	Credit
	Common Stock		200
	Paid - in Capital in Excess of Par - Common		3000
	(Issued common stock for cash)
Apr 12	Inventory	30000
	Equipment	14000
	Common Stock		310
	Paid - in Capital in Excess of Par - Common		43690
	(Issued common stock for inventory and equipment)
Apr 17	Cash	8000
	Preferred Stock		8000
	(Issued preferred stock for cash)