Answer:
See the explanation section
Explanation:
1. March 1
Debit Cash $318,500
Credit Common Stock (49,500 x $4 par value) = $198,000
Credit Additional paid-in capital $120,500
Since, the company issues 49,500 shares with an excess of par value, an additional paid-in capital account will be a credit. It can be calculated = $(318,500 - 198,000) or, [$(318,500/49,500) - $4]*49,500.
In both the cases, the additional capital is $120,500.
2. April 1
Debit Cash $84,000
Credit Common Stock $84,000
There will be no additional capital as the firm issues the same number of stock with no-par value.
3. April 6
Debit Inventory $53,000
Debit Machinery $150,000
Credit Note payable $103,000
Credit Common Stock (3,400 x $20) $68,000
Credit Additional paid-in capital $32,000
Since the company issues common stock for inventory and machinery, those should be debited. The company also accepts a notes payable to issue the common stock so that the note payable is credit. And the balancing amount will be additional paid-in capital.
