Question

Environmental Designs issues 4,000 shares of its $1 par value common stock at $15 per share. (1) Record the issuance of the stock. (2) Record the issuance of the stock assuming it is no-par value stock

Answer 1

Answer:

1                        Cash                                            $60000

                            Common Stock                             $4000

                            Additional Paid in Capital            $56000

2                       Cash                                            $60000

                             Common Stock                            $60000  

Explanation:

When stock issue at Market value the cash generated above the par value will consider as Additional Paid in Capital while cash common stock no par value it will consider as share issued at market value when share issued at no par value.