Lump Sum Issuance of Stock

question 12

Essay

Lump sum issuance of stock.Parker Corporation has issued 2,000 shares of common stock and 400 shares of preferred stock for a lump sum of $74,000 cash.
Instructions
(a) Give the entry for the issuance assuming the par value of the common stock was $5 and the fair value $30, and the par value of the preferred stock was $40 and the fair value $50. (Each valuation is on a per share basis and there are ready markets for each stock.)(b) Give the entry for the issuance assuming the same facts as
(a) above except the preferred stock has no ready market and the common stock has a fair value of $24 per share.

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Definitions:

Prostatic Urethra

The portion of the urethra that runs through the prostate gland, involved in the excretion of urine in males.

Seminal Vesicles

Glands in the male reproductive system that produce and secrete fluid that is a major component of semen.

Peristaltic Contractions

Wave-like muscle contractions that move food through the digestive tract.

Secondary Oocyte

Oocyte in which the second meiotic division stops at metaphase II unless fertilization occurs.