Stock Issuance

Pittston had the following transactions during 2017:

Required:

Identify and analyze the effect of each transaction.

1. Issued 2,700 shares of $10 par common stock for cash at $17 per share.

Activity: Financing

Accounts: Cash Increase, Common Stock Increase, Additional Paid-in Capital - Common Increase

Statement(s): Balance Sheet only

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Balance Sheet Inco me Statement

2. Issued 1,000 shares of preferred stock to acquire land. The preferred stock has a par value of $5 per share. The land has been appraised at $5,000.

Activity: Financing and Investing

Accounts: Land Increase, Preferred Stock Increase, Additional Paid-in Capital - Preferred Increase

Statement(s): Balance Sheet only

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

3. Issued 5,700 shares of $10 par common stock as payment to a company that provided advertising for the company. The stock was selling on the stock exchange at $12 per share at the time of issuance.

Activity: Financing and accounting

Accounts: Common Stock Increase, Additional Paid-in Capital - Common Increase, Advertising Expense Increase

Statement(s)Balance Sheet and Income Statement

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.