Reference no: EM132531777
Monty Corporation is authorized to issue 20,000 shares of $50 par value, 10% preferred stock and 130,000 shares of $5 par value common stock. On January 1, 2020, the ledger contained the following stockholders' equity balances.
Preferred Stock (12,000 shares) $600,000
Paid-in Capital in Excess of Par-Preferred Stock 70,500
Common Stock (65,500 shares) 327,500
Paid-in Capital in Excess of Par-Common Stock 650,000
Retained Earnings 290,000
During 2020, the following transactions occurred.
Feb. 1 Issued 2,000 shares of preferred stock for land having a fair value of $121,000.
Mar. 1 Issued 1,200 shares of preferred stock for cash at $70 per share.
July 1 Issued 15,000 shares of common stock for cash at $7 per share.
Sept. 1 Issued 350 shares of preferred stock for a patent. The asking price of the patent was $30,000. Market price for the preferred stock was $69 and the fair value for the patent was indeterminable.
Dec. 1 Issued 8,000 shares of common stock for cash at $7.50 per share.
Dec. 31 Net income for the year was $258,000. No dividends were declared.
Question 1: Journalize the transactions and the closing entry for net income.
Question 2: Enter the beginning balances for the accounts and post the journal entries to the stockholder's equity accounts
Question 3: Prepare the stockholder's equity section (balance sheet) at December 31, 2017
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