(Lump-Sum Sales of Stock with Preferred Stock) Dave Matthew Inc. issues 500 shares of 5) $10 par...

Question:

(Lump-Sum Sales of Stock with Preferred Stock) Dave Matthew Inc. issues 500 shares of 5) $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of

$100,000.

Instructions

(a) Prepare the journal entry for the issuance when the market value of the common shares is $165 each and market value of the preferred is $230 each. (Round to nearest dollar.)

(b) Prepare the journal entry for the issuance when only the market value of the common stock is known and it is $170 per share.

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