E15-5B (Lump-Sum Sales of Stock with Preferred Stock) Black Diamond Inc. issues 2,500 shares of $1 par value common stock and 1,000 shares of $50 par value preferred stock for a lump sum of $275,000. 1 B EXERCISES 3 3 3 3 3 5 c15BExercises.qxd 1/28/13 1:2

E15-5B (Lump-Sum Sales of Stock with Preferred Stock) Black Diamond Inc. issues 2,500 shares o 1 par value common stock and 1,000 shares of $50 par value preferred stock for a lump sum of 275,000.

Instructions

(a) Prepare the journal entry for the issuance when the market value of the common shares is $95 each

and market value of the preferred is $60 each.

(b) Prepare the journal entry for the issuance when only the market value of the common stock is

known and it is $90 per share.