Question

Minaret, Inc., issued 10,000 shares of $50 par value preferred stock at $68 per share and 12,000 shares of no-par value common stock at $15 per share. The common stock has no stated value. All issuances were for cash. a. Prepare the journal entries to record the share issuances. b. Prepare the journal entry for the issuance of the common stock assuming that it had a stated value of $4 per share. c. Prepare the journal entry for the issuance of the common stock assuming that it had a par value of $2 per share.

Answer 1

Journal entries are described as follows:

• The journal entry for preferred stock is recorded as a debit to cash by $680,000 and credit to preferred stock by $500,000 and the rest of the amount is transferred to additional capital at $180,000 and the journal entry for common stock with no stated value is recorded as a debit to cash and credit to common stock with equal amounts of $180,000.
• The journal entry for common stock at stated value is recorded as a debit to cash by $ 180,000 and credit to common stock and additional capital with $48,000 and $132,000.
• The journal entry for common stock at modified par value is recorded as a debit to cash by $ 180,000 and credit to common stock and additional capital with $24,000 and $156,000.

What is a journal book?

A journal book is an accounting book firstly prepared by a company to record monetary transactions in a specified format.

The journal entries are recorded as follows:

Date          Particulars                             Debit (in $)         Credit (in $)

A)     Cash (10,000 X $68)                      680,000

              Preferred stock (10,000 X $50)                              500,000    

               Additional capital (10,000 X $18)                           180,000

            (To record the issue of preferred stock)

         Cash (12,000 X $15)                       180,000  

               Common stock                                                          180,000

             (To record the issue of common stock

              with no stated value)

B)       Cash (12,000 X $15)                        180,000

                Common stock (12,000 X $4)                              48,000    

                 Additional capital (12,000 X $11 )                        132,000

          (To record the issue of common stock

           with stated value at $4 per share)

C)         Cash (12,000 X $15)                        180,000

                  Common stock (12,000 X $2)                             24,000    

                   Additional capital (12,000 X $13 )                      156,000

          (To record the issue of common stock

           with par value at $2 per share)

Therefore, the journal entries are recorded as mentioned and explained above.

Learn more about the journal entries in the related link:

brainly.com/question/20421012

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