Stock Issuance Horace Company

Exercise 11-5 Stock Issuance

Horace Company had the following transactions during 2014, its first year of business.

a.      Issued 5,000 shares of $5 par common stock for cash at $15 per share.

b.      Issued 7,000 shares of common stock on May 1 to acquire a factory building from Barkley Company. Barkley had acquired the building in 2010 at a price of$150,000. Horace esti- mated that the building was worth $175,000 on May 1, 2014.

c.       Issued 2,000 shares of stock on June 1 to acquire a patent. The accountant has been unable to estimate the value of the patent but has determined that Horace’s common stock was selling at $25 per share on June 1.

Required

1.        Record an entry for each transaction.

2.        Determine the balance sheet amounts for common stock and additional paid-in capital.