Ayayai Corp. was organized on January 1, 2017. It is authorized to issue 19,000 shares of 5%, $50 par value preferred stock and 450,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 65,000 shares of common stock for cash at $4 per share.
Mar. 1 Issued 1,100 shares of preferred stock for cash at $54 per share.
May 1 Issued 110,000 shares of common stock for cash at $5 per share.
Sept. 1 Issued 4,000 shares of common stock for cash at $4 per share.
Nov. 1 Issued 2,000 shares of preferred stock for cash at $54 per share.
Journalize these entries.

Answer and Explanation:

The journal entries are shown below:

On Jan 10

Cash      (65,000 shares × $4)$260,000  

   To Common Stock (65,000 shares  × $1)  $65,000

    To Paid in capital in excess of stated value - Common Stock  $195,000

(Being the issuance of the common stock is recorded)  

On Mar 1

Cash (1,100 shares  × $54)$59,400  

      To Preferred stock  (1,100 shares  × $50)$55,000

      To Paid in capital in excess of par value - Preferred Stock  $4,400

(Being the issuance of the preferred stock is recorded)  

On May 1

Cash (110,000 shares × $5)$550000  

      To Common Stock  (110,000 shares × $1)$110,000

      To Paid in capital in excess of stated value - Common Stock  $440,000

(Being the issuance of the common stock is recorded)  

On Sep 1

Cash (4,000 × $4)$16,000  

         To Common Stock (4,000 × $1)  $4000

         To Paid in capital in excess of stated value -  Common Stock$12,000

(Being the issuance of the common stock is recorded)  

On Nov 1

Cash (2,000 shares × $54)$108,000  

     To Preferred stock  (2,000 shares × $50)$100,000

     To Paid in capital in excess of par value - Preferred Stock  $8,000

(Being the issuance of the preferred stock is recorded)