Prepare journal entries to record the following four separate issuances of stock.

(1) A corporation issued 8,000 shares of $10 par value common stock for $96,000 cash.

(2) A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $42,500. The stock has a $1 per share stated value.

(3) A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $42,500. The stock has no stated value.

(4) A corporation issued 2,000 shares of $100 par value preferred stock for $242,500 cash.

Question

Frances Knight

Business

19 April, 14:36

Prepare journal entries to record the following four separate issuances of stock.

(1) A corporation issued 8,000 shares of $10 par value common stock for $96,000 cash.

(2) A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $42,500. The stock has a $1 per share stated value.

(3) A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $42,500. The stock has no stated value.

(4) A corporation issued 2,000 shares of $100 par value preferred stock for $242,500 cash.

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Answers (1)

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Mariyah Bowers · Answer 1

1)

Cash ... 96,000

Common Stock, $10 Par value (8000 X $10) ... 80,000

Paid-in Capital in Excess of Par-Common Stock ... 16,000

2)

Organisation expenses ... 42,500

Common stock, $1 stated value ... 4,000

Paid in capital in excess of stated value-common stock ... 38,500

3)

Organisation expenses ... 42,500

Common Stock, No par value ... 42,500

4)

Cash ... 242,500

Preferred stock, $100 par value ... (100*2000) 200,000

Paid in Capital in excess of par--preferred stock ... 42,500