Chapter Two and Three Problems Please complete the following 7 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the...

Chapter Two and Three Problems
Please complete the following 7 exercises below in either Excel or a word document (but must be single
document). You must show your work where appropriate (leaving the calculations within Excel cells is
acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.
Chapter 2 Exercise 1
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.
Jackson Corporation
Debit Credit
Cash $2,000,000
Common Stock $100,000
Paid in capital in excess of Par $1,900,000
. Royal Corporation has no-par common with a stated value of $5 per share.
Royal Corporation
Debit Credit
Cash $2,000,000
Common Stock $500,000
Paid in capital in excess of
Stated Value $1,500,000
c. French Corporation has no-par common; no stated value has been assigned
French Corporation
Debit Credit
Cash $2,000,000
Common Stock $2,000,000
Chapter 2 Exercise 3
3. Analysis of stockholders' equity
Star Corporation issued both common and prefe
ed stock during 20X6. The stockholders' equity sections of the
company's balance sheets at the end of 20X6 and 20X5 follow
20X6 20X5
Prefe
ed stock, $100 par value, 10% $580,000 $500,000
Common stock, $10 par value 2,350,000 1,750,000
Paid-in capital in excess of par value

Prefe
ed 24,000 —
Common 4,620,000 3,600,000
Retained earnings 8,470,000 6,920,000
Total stockholders' equity $16,044,000 $12,770,000
a. Compute the number of prefe
ed shares that were issued during 20X6.
Par value of Prefe
ed share $100
Increase in Share capital $80,000 ($580,000 – 500,000)
Number of shares issued 800 ($80,000 ÷ 100)
. Calculate the average issue price of the common stock sold in 20X6.
Par value of Common stock $10
Increase in Share capital $600,000 ($2,350,000 – 1,750,000)
Number of shares issued 60,000 ($600,000 ÷ 10)
Increase in Share capital $600,000 ($2,350,000 – 1,750,000)
Increase in Paid in capital
in excess of par $1,020,000 ($4,620,000 – 3,600,000)
Total Increase $1,620,000
Issue price per share $17 ($1,620,000 ÷ 60,000)
c. By what amount did the company's paid-in capital increase during 20X6?
20X6 20X5
Prefe
ed stock, $100 par value, 10% $580,000 $500,000
Common stock, $10 par value 2,350,000 1,750,000
Paid-in capital in excess of par value

Prefe
ed 24,000 —
Common 4,620,000 3,600,000
------------- --------------
7,574,000 5,850,000
========= ========
Increase in Paid in Capital 1,724,000
d. Did Star's total legal capital increase or decrease during 20X6? By what amount?
Since the par value of the shares had not changed during the year, there is no change in
legal capital.
Chapter 2 Problem 1
1. Bond computations: Straight-line amortization
Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. 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...