Coronado Industries has issued 1,500 shares of common stock and 300 shares of preferred stock for a lump sum of $55,000 cash. 1). Give the entry for the issuance assuming the par value of the common stock was $5 and the fair value $30, and the par value of the preferred stock was $40 and the fair value $50. (Each valuation is on a per share basis and there are ready markets for each stock.) 2). Give the entry for the issuance assuming the same facts as the par value of the common stock was $5 and the fair value of $22 per share, and the par value of the preferred stock was $40 and has no ready market.

Coronado Industries has issued 1,500 shares of common stock and 300 shares of preferred stock for a lump sum of $55,000 cash. 1). Give the entry for the issuance assuming the par value of the common stock was $5 and the fair value $30, and the par value of the preferred stock was $40 and the fair value $50. (Each valuation is on a per share basis and there are ready markets for each stock.) 2). Give the entry for the issuance assuming the same facts as the par value of the common stock was $5 and the fair value of $22 per share, and the par value of the preferred stock was $40 and has no ready market.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 5MCQ

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