Question

Prepare the journal entry to record Jevonte Company’s issuance of 42,000 shares of its common stock assuming the shares have a: $4 par value and sell for $20 cash per share. $4 stated value and sell for $20 cash per share.

Answer 1

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