1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 12-1 Capital Stock Transactions

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning ISSUING PREFERRED STOCK AT PAR VALUE Review issuing common stock… Cash Receipts Journal (investors are paying for stock) Debit Cash Credit Capital Stock—Common Issuing preferred stock very similar entry… Cash Receipts Journal (investors are paying for stock) Debit Cash Credit Capital Stock—Preferred See next slide… 2 LESSON 12-1

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 12-1 Number of Shares Par Value per Share = Total Par Value × ISSUING PREFERRED STOCK AT PAR VALUE page 343 800$100.00=$80,000.00 × March 1. Received cash from Brenda Henson for 800 shares of $100.00 par value preferred stock at $100.00 per share, $80,000.00. Receipt No. 117.

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning ISSUING PREFERRED STOCK FOR MORE THAN PAR VALUE Preferred stock may be issued for more than par value… Cash Receipts Journal (investors are paying for stock) Debit Cash Credit Capital Stock—Preferred Credit Paid-in Capital in Excess of Par Value--Preferred See next slide… 4 LESSON 12-1

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 12-1 Number of Shares Value per Share =Value × ISSUING PREFERRED STOCK FOR MORE THAN PAR VALUE page 344 300$120.00=$36,000.00 × Total received300100.00= 30,000.00 × Par value $ 6,000.00Amount received in excess of par value April 6. Received cash from Adam Kellogg for 300 shares of $100.00 par value preferred stock at $120.00 per share, $36,000.00. Receipt No. 127. Do WT 12-1, May 2 entry.

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning ISSUING PREFERRED STOCK FOR LESS THAN PAR VALUE Preferred stock may be issued for less than par value… Cash Receipts Journal (investors are paying for stock) Debit Cash Debit Discount on Sale of Preferred Stock (contra stockholders’ account—thus, debit) Credit Capital Stock—Preferred See next slide… 6 LESSON 12-1

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 12-1 Number of Shares Value per Share =Value × page 345 500$100.00=$50,000.00 × Par value50090.00= 45,000.00 × Total received $ 5,000.00Total discount ISSUING PREFERRED STOCK FOR LESS THAN PAR VALUE Do WT 12-1, May 3 entry. August 9. Received cash from Hazel Deloach for 500 shares of $100.00 par value preferred stock at $90.00 per share, $45,000.00. Receipt No. 173.

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning ISSUING PREFERRED STOCK FOR ASSETS OTHER THAN CASH Corporations may issue capital stock in exchange for assets Investor and corporation must agree on value of the assets and the capital stock General journal—if no cash involved See next slide… 8 LESSON 12-1

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 12-1 ISSUING PREFERRED STOCK FOR ASSETS OTHER THAN CASH page 346 Number of Shares Value per Share =Value × 100$120.00=$12,000.00 × Total received100100.00= 10,000.00 × Par value $ 2,000.00Amount received in excess of par value October 7. Received office equipment from Steven McBee at an agreed value of $12,000 for 100 shares of $100.00 par value preferred stock. Memorandum No. 246. Do WT 12-1, first May 5 entry.

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 12-1 ISSUING COMMON STOCK WITH NO PAR VALUE page 347 July 8. Received cash from Elizabeth Griffin for 1,000 shares of no-par value common stock at $14.00 per share, $14,000.00. Receipt No. 148. Do WT 12-1, May 7 entry.

11. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 12-1 ISSUING COMMON STOCK WITH A STATED VALUE page 347 October 10. Received cash from Alice Blake for 100 shares of $10.00 stated value common stock at $12.00 per share, $1,200.00. Receipt No. 181. Do WT 12-1, second May 5 entry.

12. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 12-1 HOW DID YOU DO? page 348 Do OYO 12-1. Due Wednesday, April 15!