Sheffield Corp. began operations on April 1 by issuing 52,500 shares of $4 par value common stock for cash at $15 per share. In addition, Sheffield issued 2,600 shares of $1 par value preferred stock for $3 per share. Journalize the issuance of the common and preferred shares.

1. For Common Stock issued:

Debit cash for $787,500

Credit Common Stock for $210,000

Credit Paid-In Capital in Excess of Par- Common Stock for $577,500

2. For Preferred Stock Issued:

Debit cash for $7,800

Credit Preferred Stock for $2,600

Credit Paid-In Capital in Excess of Par- Preffered Stock for $5,200

Explanation:

Note: See the attached excel file for how the journal entries will look exactly in the book.

Before journalizing the issuance, the following calculations are done first:

Cash received form common stock issued = 52,500 * $15 = $787,500

Common stock issued par value = 52,500 * $4 = $210,000

Paid-In Capital in Excess of Par- Common Stock = $787,500 - $210,000 = $577,500

Cash received form preferred stock issued = 2,600 * $3 = $7,800

Preferred stock issued par value = 2,600 * $1 = $2,600

Paid-In Capital in Excess of Par- Preferred Stock = $7,800 - $2,600 = $5,200    

answer loneliness;