Stock issuance (Learning Objectives 2 & 3) 5–10 min.

Buckeye, Inc., reported the following on its balance sheet at December 31, 2014:

Common Stock, $3.00 par value, 550,000 shares authorized, 400,000 shares issued and outstanding Paid-in Capital in Excess of Par Retained Earnings

$ 1,200,000 425,000 2,640,000 1. Assume Buckeye, Inc., issued all of its stock during 2014 in one transaction.

Journalize the company’s issuance of the stock for cash.

2. Was Buckeye, Inc.’s main source of stockholders’ equity paid-in capital or profitable operations? How can you tell?

AppendixLO1