On February 25, Madison County Rocks Inc., a marble contractor, issued for cash 120,000 shares of $36 par common stock at $40

On February 25, Madison County Rocks Inc., a marble contractor, issued for cash 120,000 shares of $36 par common stock at $40, and on June 3, it issued for cash 50,000 shares of preferred stock, $8 par at $9.

a. Journalize the entries for February 25 and June 3.
b. What is the total amount invested (total paid-in capital) by all stockholders as of June 3?


Answer:












a.
 Feb. 25 Cash (120,000 shares × $40) 4,800,000
Common Stock (120,000 shares × $36) 4,320,000
Paid-In Capital in Excess of Par—
Common Stock [120,000 shares × ($40 – $36)] 480,000
June 3 Cash (50,000 shares × $9) 450,000
Preferred Stock (50,000 shares × $8) 400,000
Paid-In Capital in Excess of Par—
Preferred Stock [50,000 shares × ($9 – $8)] 50,000
b. $5,250,000 ($4,800,000 + $450,000)