Osage Corporation issued 2,000 shares of stock. Instructions Prepare the entry for the issuance under the following assumptions. (a) The stock had a par value of $5 per share and was issued for a total of $52,000. (b) The stock had a stated value of $5 per share and was issued for a total of $52,000. (c) The stock had no par or stated value and was issued for a total of $52,000. (d) The stock had a par value of $5 per share and was issued to attorneys for services during incorporation valued at $52,000. (e) The stock had a par value of $5 per share and was issued for land worth $52,000.

Question

Jose West

Business

25 January, 21:16

Osage Corporation issued 2,000 shares of stock. Instructions Prepare the entry for the issuance under the following assumptions. (a) The stock had a par value of $5 per share and was issued for a total of $52,000. (b) The stock had a stated value of $5 per share and was issued for a total of $52,000. (c) The stock had no par or stated value and was issued for a total of $52,000. (d) The stock had a par value of $5 per share and was issued to attorneys for services during incorporation valued at $52,000. (e) The stock had a par value of $5 per share and was issued for land worth $52,000.

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Tabitha Briggs · Answer 1

The journal entries will as under the explanation below.

Explanation:

(a) The stock had a par value of $5 per share and was issued for a total of $52,000.

Account Name Dr ($) Cr ($)

Cash 52,000

Common stock (2,000 * 5) 10,000

Paid in capital in excess of per value 42,000

(To record common stock issued in excess of par value.)

(b) The stock had a stated value of $5 per share and was issued for a total of $52,000.

Account Name Dr ($) Cr ($)

Cash 52,000

Common stock (2,000 * 5) 10,000

Paid in capital in excess of stated value 42,000

(To record common stock issued in excess of stated value.)

Note: The stated value is used for internal accounting purpose when there is no par value for the stock.

(c) The stock had no par or stated value and was issued for a total of $52,000.

Account Name Dr ($) Cr ($)

Cash 52,000

Common stock 52,000

(To record common stock issued that had no par or stated value.)

Note: When stock had no par or stated value, the total proceeds from the issue becomes the legal capital.

(d) The stock had a par value of $5 per share and was issued to attorneys for services during incorporation valued at $52,000.

Account Name Dr ($) Cr ($)

Attorney service expenses 52,000

Common stock (2,000 * 5) 10,000

Paid in capital in excess of per value 42,000

(To record common stock issued to attorneys for services at a premium.)

(e) The stock had a par value of $5 per share and was issued for land worth $52,000.

Account Name Dr ($) Cr ($)

Land (Fair value) 52,000

Common stock (2,000 * 5) 10,000

Paid in capital in excess of per value 42,000

(To record common stock issued for land at a premium.)