Respuesta :
Answer:
See the explanation below:
Explanation:
Crane Company
Date Details DR ($) CR ($)
June 12: Cash 326,250
Common stock 87,000
Share Premium - Common stock (1) 239,250
Being the issue of common stock at a premium.
June 11: Cash 299,600
Preferred stock (2) 282,800
Share premium - Preferred stock (3) 16,800
Being the issue of preferred stock at a premium.
Nov. 28 Treasury stock 3,450
Common stock (4) 4,800
Cash 8,250
Being a purchase of treasury stock at more than per value.
Note:
(1) Share Premium - Common stock = 326,250 - 87,000 = 239,250
(2) Preferred stock =2,800 * $101 = 282,800
(3) Share premium - Preferred stock = (107 - 101) * 2,800 = 16,800
(4) Common stock = 8,250 - 3450 = 4,800 when the par value method is used instead of cash method.
The stocks or shares are the ownership in the business of any corporation or a company. The shares value is determined by taking the total requires capital value and the amount of per-share price.
The shares can be either common shares or preferred shares. They differ based upon the rights and amount of dividends to the shareholders.
The journal entries for the Crane Company are attached below.
Working Note:
1. The share premium- common stock is determined by the difference of cash amount and common stock amount.
2.
[tex]\begin{aligned}\text{Preferred Stock}&=\text{Number of shares}\times\text{Par Value}\\&=2,800\times\$101\\&=\$282,800\end{aligned}[/tex]
[tex]\begin{aligned}\text{Share Premium-Preferred Stock}&=\left( \text{Cash Value}-\text{Par Value}\right )\times\text{Number of shares}\\&=\left(\$107-\$101 \right )\times2,800\\&=\$16,800\end{aligned}[/tex]
3. The amount of common stock for treasury is the difference between the cash amount and treasury stock amount.
To know more about common stock and preferred stock, refer to the link:
https://brainly.com/question/9970004
