Question

Prepare journal entries to record each of the following four separate issuances of stock.

Answer 1

Answer:

a.

DR Cash $48,000  

CR Common Stock (4,000*10)  $40,000

CR Paid in Excess of Par- Common Stock   $8,000

(To record common stock issued for cash)

Working

Paid in Excess of Par- Common Stock = 48,000- 40,000  

= $8,000

b.No stated value

DR Organization expenses    $57,000  

CR Common Stock   $57,000

(To record common stock issued to promoters)

c.

DR Organization expenses $57,000  

CR Common Stock (2,000 * $3)  $6,000

CR Paid in Excess of Par- Common Stock   $51,000

(To record common stock issued to promoters)

Working

Paid in Excess of Par- Common Stock = 57,000 - 6,000

= $51,000

 

d.

DR Cash $107,000  

CR Preferred Stock (1,000*50)  $50,000

CR Paid in Excess of Par- Preferred Stock  $57,000

(To record preferred stock issued for cash)  

Working

Paid in Excess of Par- Preferred Stock

= 107,000 - 50,000

= $57,000