Answer:
Find the detailed answer in the explanation section
Explanation:
For A. $4 par value and sell for $20 cash per share
Par Value is $4 x 42,000 shares
=$168,000
Cash sales is $20 x 42,000 shares
=$840,000
Paid-in captial in excess of par value, common stock = $840,000 - $168,000
=$672,000
Journal entry:
Dr Cash. $840,000
Cr common stock(par value) $168,000 Cr Paid-in captial in excess of par value(common stock). $672,000
For B. $4 stated value and sell for $20 cash per share.
Stated Value is $4 x 42,000 shares
=$168,000
Cash sales is $20 x 42,000 shares
=$840,000
Paid-in captial in excess of stated value, common stock = $840,000 - $168,000
=$672,000
Journal entry:
Dr Cash. $840,000 Cr common stock(stated value) $168,000
Cr Paid-in captial in excess of stated value(common stock). $672,000
