Answer to Question #256144 in Accounting for Nel

Question

Instructions:

Prepare journal entries for the following transactions:

13. Joaquin purchased 100,000 shares of Joker Corporation with par value of 100 for 1,000 per share.

14. Bruno Mars sold his 100,00 shares on Pop Corporation with par value of 100 per share to Kendrick.

Answer 1

Solution:

The journal entries are as follows:

13:

Dr. Investment in Joker Corporation (100,000 x 100)         10,000,000

Dr. Additional Paid-in capital (1,000 – 100) x 100,000))  90,000,000

                 Cr. Cash (100,000 x 1,000)                                                                     100,000,000

(Being purchase of Joker Corporation shares at a premium)

 

14:

Dr. Cash                            (1,000 x 100)                                    10,000

                 Cr. Common Stock                                                                                            10,000

(Being sale of shares held in Pop Corporation to Kendrick)