Cates Corporation was organized on January 1, 2010. It is authorized to issue 10,000 shares of 8%,

Question:

Cates Corporation was organized on January 1, 2010. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 60,000 shares of common stock for cash at $3.50 per share.

Mar. 1 Issued 5,000 shares of preferred stock for cash at $102 per share.

May 1 Issued 90,000 shares of common stock for cash at $4 per share.

Sept. 1 Issued 10,000 shares of common stock for cash at $5 per share.

Nov. 1 Issued 4,000 shares of preferred stock for cash at $104 per share.

Instructions

(a) Journalize the transactions.

(b) Post to the stockholders’ equity accounts. (Use T accounts.)

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...