Journal entries for capital contributions. Prepare journal entries to record the following transactions for Healy Corporation during the current year under U.S. GAAP. The accounting period of Healy Corporation ends on December 31.
a. Issued 100,000 of $10 par value common stock for $14 per share on January 2.
b. Issued 10,000 shares of common stock on January 2 in the acquisition of a patent. The firm has no separate information about the fair value of the patent.
c. Issued 2,000 shares of $100 convertible preferred stock on March 1 for $100 per share. Holders may convert each share of preferred stock into four shares of common stock.
d. Sold 10,000 common warrants on the open market on June 1 for $5 per warrant. Holders can exchange each warrant and $24 in cash for a share of common stock.
e. Holders of 600 shares of convertible preferred stock (see c) exchanged their shares for common stock on September 15. The market price of the common stock on this date was $26 per share. Record the conversion using the carrying values. f. Holders of 4,000 common stock warrants exchanged their warrants (see d) and $96,000 in cash for common stock on November 20. The market price of the common stock on this date was $32 per share.
g. Granted options to employees to purchase 5,000 shares of common stock for $35 per share on January 2. The fair value of these options is $30,000 and the requisite service period is three years. The firm expects all the options to vest.