Six months later the balance of the stock is subscribed for, subscriptions being received from A for 50 shares, B, 50 shares, D, 100 shares, and E, 50 shares. C sells 50 shares to B. These new shares are paid for in cash.
Make all entries in general books.
Make all entries in stock books.
2. A, B, and C organize a corporation with an authorized capitalization of $100,000.00, divided into 1,000 shares of $100.00 each. A subscribes for 400 shares, B, 300 shares, and C, 200 shares. The corporation buys from D land and buildings for $20,000.00, paying him $10,000.00 in cash and issuing to him 100 shares of stock.
Subscriptions are paid as follows: A pays $20,000.00 cash and gives his note due in 60 days for $20,000.00; B pays $20,000.00 cash and gives his note for $10,000.00 payable in 30 days; C pays $10,000.00 cash and gives his note for $10,000.00 payable in 10 days.
Make all entries in journal and cash book and post to ledger.
Note.—Land and buildings are grouped under the head of real estate.
3. John Davis and Daniel Greene own the La Belle mine, and to secure capital for its development they decide to organize a mining company and to sell shares. A corporation is organized with a capitalization of $1,000,000.00 in shares of $1.00 each. Of this stock 999,000 shares are issued to Davis and Greene, each receiving an equal number, and they, in turn, deed the La Belle mine to the company. The remaining 1,000 shares are subscribed and paid for by Martin Otis. Davis and Greene donate to the treasury 49,800 shares to be sold for the purpose of securing working capital. The directors, by proper resolution, decide to sell 200,000 shares: 50,000 shares to be sold at 20 cents on the dollar, 50,000 shares at 25 cents, and 100,000 shares at 35 cents. The resolution also provides that the corporation's liability for working capital shall be no more than the amount realized from the sale of treasury stock. Subscriptions are received for the 200,000 shares and payments are made at the prices specified.
Make all necessary entries to get these transactions properly recorded on both the general and stock books.
STOCK ISSUED FOR PROMOTION