On January 22, Zentric Corporation issued for cash 342,000 shares of no-par common stock at $20. On February 14, Zentric issued at par value 9,000 shares of preferred 6% stock, $80 par for cash. On August 30, Zentric issued for cash 31,000 shares of preferred 6% stock, $80 par at $85. Journalize the entries to record the January 22, February 14, and August 30 transactions. Refer to the Chart of Accounts for exact wording of account titles.

Journal Entries

January 22

Dr. Cash                  $6,840,000  

Cr. Common stock  $6,840,000

February 14

Dr. Cash                  $720,000  

Cr. Preferred stock $720,000

August 30

Dr. Cash                                                                   $2,635,000

Cr. Preferred stock                                                  $2,480,000

Cr. Paid in capital excess of par-Preferred stock $155,000

Explanation:

January 22

Common Stock = Numbers of shares issued x Issue price per share

Common Stock = 342,000 shares x $20

Common Stock = $6,840,000

February 14

Preferred stock = Numbers of preferred shares x Price per preferred share

Preferred stock = 9,000 shares x $80 per share

Preferred stock = $720,000

August 30

Cash Received = Numbers of shares x issuance price = 31,000 x $85 = $2,635,000

Cash Received = Numbers of shares x par value = 31,000 x $80 = $2,480,000

Paid in capital excess of par  = $2,635,000 - $2,480,000 = $155,000

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