FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Ee 39.

On July 1, 2021, Nall Co. issued 2,500 shares of its
$10 par common stock and 5,000 shares of its $12
par preferred stock for a lump sum of $140,000. At
this date Nall's common stock was selling for $18 per
share and the preferred stock for $24 per share. a.
Record the journal entry for this allocation and
insurance using the proportional method. b. Record
the journal entry for this allocation and issuance
using the incremental method, assuming you do not
have the market value for preferred stock.
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Transcribed Image Text:On July 1, 2021, Nall Co. issued 2,500 shares of its $10 par common stock and 5,000 shares of its $12 par preferred stock for a lump sum of $140,000. At this date Nall's common stock was selling for $18 per share and the preferred stock for $24 per share. a. Record the journal entry for this allocation and insurance using the proportional method. b. Record the journal entry for this allocation and issuance using the incremental method, assuming you do not have the market value for preferred stock.
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