Rodriguez Corporation issues 8,000 shares of its common stock for $50,000 cash on February 20. Prepare journal entries to record this event under each of the following separate situations. 1. The stock has a $2 par value. 2. The stock has neither par nor stated value. 3. The stock has a $1 stated value.

Question

Andrew Long

Business

4 April, 04:29

Rodriguez Corporation issues 8,000 shares of its common stock for $50,000 cash on February 20. Prepare journal entries to record this event under each of the following separate situations. 1. The stock has a $2 par value. 2. The stock has neither par nor stated value. 3. The stock has a $1 stated value.

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Mercedes Harvey · Answer 1

Solution:

1. Cash a/c Dr $50,000

To common stock $32000 (8000*4)

To paid in capital in excess of par-common stock $18,000

2. Cash a/c Dr $50,000

To common stock $50,000

3. Cash a/c Dr $50,000

To common stock $16000 (8000*2)

To paid in capital in excess of stated value-common stock $34,000