Answer:
a.
March 1
Debit : Cash $318,500
Credit : Common Stock $198,000
Credit : Excess of Par $120,500
<em>Being Issue of Par value Shares for $318,500 cash</em>
b.
April 1
Debit : Cash $84,000
Credit : Common Stock $84,000
<em>Being Issue of no Par value shares for $84,000 cash</em>
c.
April 6
Debit : Inventory $53,000
Debit : Note Receivable $103,000
Credit : Common Stock $68,000
Credit : Excess of Par $88,000
<em>Being Issue of Par value Shares for Inventory and Note Receivable</em>
Explanation:
Note: We are instructed to prepare journals from the issuer`s point of view and this needs to be followed.
When shares are issued, the Common Stock increases :
a. For par value Common Stocks, any price paid in excess of par value is accounted in Excess of Par Reserve.
b. For no par value shares, there is no Excess of Par Reserve, we simply record the increase in Common Stock at the price paid for.
