Question

Journalizing issuance of stock

Steller Systems completed the following stock issuance transactions:

May 19 Issued 1,700 shares of \(3 par value common stock for cash of \)10.50 per share.

Jun. 3 Issued 300 shares of \(9, no-par preferred stock for \)15,000 cash.

11 Received equipment with a market value of \(68,000 in exchange for 5,000 shares of the \)3 par value common stock.

Requirements

1. Journalize the transactions. Explanations are not required.

Short answer

Issued 1,700 shares on premium of $7.5, 300 shares for $15,000, and 5,000 shares in exchange of $68,000 equipment on premium of $53,000.

Step-by-step solution

Basic Introduction-

Market value is the current price of an asset in the marketplace. Market value also alludes to the market capitalization of a publicly traded corporation.

Journals

Date	Transaction	Debit	Credit
May 19	Cash (1,700 * $10.50)	$17,850
	Common stock (1,700 * $3)		$5,100
	Paid-in capital in excess of par		$12,750
Jun 3	Cash	$15,000
	Preferred stock		$15,000
Jun 11	Equipment	$68,000
	Common stock		$15,000
	Paid-in capital in excess of par		$53,000