Penne Pharmaceuticals sold 15 million shares of its $1 par common stock to provide funds for research and development. If the issue price is $12 per share, what is the journal entry to record the sale of the shares? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i. e., 10,000,000 should be entered as 10).)

Question

Connor Pope

Business

6 May, 16:38

Penne Pharmaceuticals sold 15 million shares of its $1 par common stock to provide funds for research and development. If the issue price is $12 per share, what is the journal entry to record the sale of the shares? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i. e., 10,000,000 should be entered as 10).)

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Jeremy Trujillo · Answer 1

The journal entry is as follows

Cash A/c Dr $180,000,000 ($15,000,000 * $12)

To Common stock $15,000,000 ($15,000,000 * $1)

To Paid in capital in excess of par - Common stock A/c $165,000,000

(Being the sale of the shares is recorded)

The remaining amount left i. e transferred to the paid in capital in excess of par value of common stock

= $180,000,000 - $15,000,000

= $165,000,000