Problem #5: Stock Issuance

Peck Corporation is authorized to issue 20,000 shares of $50 par value, 10% preferred stock and 125,000 shares of $5 par value common stock. On January 1, 2021, the ledger contained the following stockholders equity balances.

Preferred Stock (10,000 shares) $500,000

Paid-in Capital in Excess of ParPreferred Stock 75,000

Common Stock (70,000 shares) 350,000

Paid-in Capital in Excess of ParCommon Stock 700,000

Retained Earnings 300,000

During 2021, the following transactions occurred.

Feb. 1 Issued 2,000 shares of preferred stock for land having a fair value of $120,000. Mar. 1 Issued 1,000 shares of preferred stock for cash at $65 per share. July 1 Issued 16,000 shares of common stock for cash at $7 per share.

Sept. 1 Issued 400 shares of preferred stock for a patent. The asking price of the patent was $30,000. Market price for the preferred stock was $70.

Dec. 1 Issued 8,000 shares of common stock for cash at $7.50 per share. Dec. 31 Net income for the year was $260,000. No dividends were declared. Instructions

(a) Journalize the transactions and the closing entry for net income.