Ehrlich Corporation has issued 3,000 shares of common stock and 400 shares of preferred stock for a lump sum of $75,000 cash. Instructions (a) Give the entry for the issuance assuming the par value of the common stock was $5 and the fair value $32, and the par value of the preferred stock was $20 and the fair value $50. (b) Give the entry for the issuance assuming the same facts as (a) above except the preferred stock has no ready market and the common stock has a fair value of $22 per share.

Ehrlich Corporation has issued 3,000 shares of common stock and 400 shares of preferred stock for a lump sum of $75,000 cash. Instructions (a) Give the entry for the issuance assuming the par value of the common stock was $5 and the fair value $32, and the par value of the preferred stock was $20 and the fair value $50. (b) Give the entry for the issuance assuming the same facts as (a) above except the preferred stock has no ready market and the common stock has a fair value of $22 per share.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 12MC: A corporation issued 100 shares of $100 par value preferred stock for $150 per share. The resulting...

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