2-Fire Red Company is authorized to issue 20,000 shares of 8%, $100 par value preferred

stock and 1,000,000 shares of no-par common stock with a stated value of $1 per share.

If Fire Red issues 10,000 shares of preferred stock for land with an asking price of

$1,020,000 and a market value of $1,080,000, which of the following would be the journal

entry for Fire Red to record?

a.

Land

1,000,000

Preferred Stock

1,000,000

b.

Land

1,080,000

Preferred Stock

1,080,000

c.

Land

1,200,000

Preferred Stock

1,000,000

Paid-in Capital in Excess of Par-Preferred

200,000

d.

Land

1,080,000

Preferred Stock

1,000,000

Paid-in Capital Excess of Par-Preferred

80,000

3-On January 1, Key Corporation had 2,000,000 shares of $10 par value common stock

outstanding. On March 31, the company declared a 20% stock dividend. Market value of

the stock was $15/share. As a result of this event,

Keys Paid-in Capital in Excess of Par account increased $2,000,000

b.Keys total stockholders equity was unaffected.

c. Keys Stock Dividends account increased $6,000,000.

d

All of these answer choices are correct.

4- Sunshine Company issued 4,000 shares of its $5 par value common stock in payment of its attorney's bill of $80,000. The bill was for services performed in helping the company incorporate. Crain should record this transaction by debiting

a. legal expense for 800000

b .orginization expense for 20000

c.legal expense for 20000

organization expense for 80000