Dave Matthew Inc. issues 600 shares of common stock with a par value of $20 and 120 shares of preferred stock with a par value of $100 for a lump sum of $100,000.

Instructions

(a) Prepare the journal entry for the issuance when the market price of the common stock is $160 each and the market price of the preferred stock is $235 each. (Round to the nearest dollar.

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