Below are two transactions for Navaho Co.

1. On June 1, Navaho Co. issued 2,000 shares of $5 par common stock for $16 per share.

2. On June 15, Navaho Co. issued 1,200 shares of $5 par preferred stock to acquire a building. The stock is not widely traded, and the current market value of the stock is not evident. The building has recently been appraised by an independent firm as having a market value of $15,000.

Required
For each of these transactions, determine the impact on the accounting equation of the journal entry that Navaho Co. would make.

Question

Below are two transactions for Navaho Co.

1. On June 1, Navaho Co. issued 2,000 shares of $5 par common stock for $16 per share.

2. On June 15, Navaho Co. issued 1,200 shares of $5 par preferred stock to acquire a building. The stock is not widely traded, and the current market value of the stock is not evident. The building has recently been appraised by an independent firm as having a market value of $15,000.

Required
For each of these transactions, determine the impact on the accounting equation of the journal entry that Navaho Co. would make.

Quizplus · Accepted Answer

The Answer of Below are two transactions for Navaho Co.

1. On June 1, Navaho Co. issued 2,000 shares of $5 par common stock for $16 per share.

2. On June 15, Navaho Co. issued 1,200 shares of $5 par preferred stock to acquire a building. The stock is not widely traded, and the current market value of the stock is not evident. The building has recently been appraised by an independent firm as having a market value of $15,000.

Required
For each of these transactions, determine the impact on the accounting equation of the journal entry that Navaho Co. would make.

Below Are Two Transactions for Navaho Co