On May 10, a company issued for cash 1,600 shares of no-par common stock (with a stated value of $4) at $15, and on May 15, it issued for cash 5,000 shares of $17 par preferred stock at $59. Journalize the entries for May 10 and 15, assuming that the common stock is to be credited with the stated value. If an amount box does not require an entry, leave it blank.

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Goodman

Business

30 March, 14:34

On May 10, a company issued for cash 1,600 shares of no-par common stock (with a stated value of $4) at $15, and on May 15, it issued for cash 5,000 shares of $17 par preferred stock at $59. Journalize the entries for May 10 and 15, assuming that the common stock is to be credited with the stated value. If an amount box does not require an entry, leave it blank.

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Isabel · Answer 1

May 10

Cash (debit) $6,400

Common stock (credit) $6,400

May 15

Cash (debit) $295,000

preferred stock (credit) $295,000

Explanation:

Common stock

Companies Act requires the Common Shares to have par value.

However shares can be elected as no-par common stock and presented at stated value.

Preferred stock

Must not necessarily have par value.

Can be presented at issue price.