Mendoza Corporation was organized on January 1, 2020. It is authorized to issue 20,000 shares of 6%, $40 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 100,000 shares of common stock for cash at $3 per share.
Mar. 1 Issued 10,000 shares of preferred stock for cash at $55 per share.
Apr. 1 Issued 25,000 shares of common stock for land. The asking price of the land was $90,000. The company’s estimate of fair value of the land was $75,000.
May 1 Issued 75,000 shares of common stock for cash at $4 per share.
Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill for $50,000 for services performed in helping the company organize.
Sept. 1 Issued 5,000 shares of common stock for cash at $6 per share.
Nov. 1 Issued 2,000 shares of preferred stock for cash at $60 per share.

a, Journalize the transactions
b. Prepare the paid-in capital section of the stockholders' equity at December 31, 2020

a) Journal Entry

Jan 10 Debit Bank $300,000 Credit Capital $200,000 Credit Additional Capital paid-in-excess $100,000

Mar 01 Debit Bank $550,000 Credit Preferred Capital $400,000 Credit Capital paid in excess- Preferred $150,000

Apr 01 Debit Land $75,000 Credit Capital $50,000 Credit Capital paid in excess $25,000

May 01 Debit Bank $300,000 Credit Capital $150,000 Credit Capital paid in excess $150,000

Aug 01 Debit Attorney Fees $50,000 Credit Capital $20,000 Credit Capital Paid in excess $30,000

Sep 01 Debit Bank $30,000 Credit Capital $10,000 Credit Capital Paid in excess $20,000

Nov 01 Debit Bank $120,000 Credit Capital - Preferred $80,000 Credit Capital Paid in excess- Preferred $40,000

b) Paid in capital - Common stock = $325,000

                           - Preferred stock  =  $190,000

Explanation:

When stock has a par value or stated value then that means its legally recognized capital per issue can only be calculated as follows

shares issued * par value

or shares issued * stated value

then any surplus cash above the par or state value is recognized as capital paid in excess

Paid in capital - Common stock

10 Jan = $100,000

01 Apr = $25,000

01 May = $150,000

01 Aug = $30,000

01 Sep = $20,000

Total = $325,000

Paid in capital - Preferred stock

01 Mar = $150,000

01 Nov = $40,000

Total = $190,000

Explanation:

the explanation can be seen in the file attached below. i hope it help

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