Part-1

Exercise 1

Issuance of stock

Prepare journal entries to record the issuance of 100,000 shares of common stock at $20 per share for each of the following independent cases:

a. Jackson Corporation has common stock with a par value of $1 per share.

b. Royal Corporation has no-par common with a stated value of $5 D share.

c. French Corporation has no-par common; no stated value has been as signed

Exercise 2

Analysis of stockholders' equity

Star Corporation issued both common and preferred stock during 19X6. The stockholders' equity sections of the company's balance sheets at the end of 19X6 and 19X5 follow.

a. Compute the number of preferred shares that were issued during 19X6.

b. Calculate the average issue price of the common stock sold in 19X6.

c. By what amount did the company's paid-in capital increase during 19X6?

d. Did Star's total legal capital increase or decrease during 19X6? By what amount?

Part 2

1. Bond computations: Straight-line amortization

Southlake Corporation issued $900,000 of 8% bonds on March 1, 19X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow.

• Case A-The bonds are issued at 100.
• Case B-The bonds are issued at 96.
• Case C-The bonds are issued at 105.

Southlake uses the straight-line method of amortization.

Instructions: