Answer:
1. Debit Cash $152,000
Credit Common stock $152,000
Being Issue of 19,000 common stock at neither par nor stated value
2. Debit Cash $152,000
Credit Common stock $38,000
Credit Additional paid-in capital $114,000
Being Issue of 19,000 common stock at $2 par value
3. Debit Cash $152,000
Credit Common stock $95,000
Credit Additional paid-in capital $57,000
Being Issue of 19,000 common stock at $5 stated value
Explanation:
<em>1. The stock has neither par nor stated value
</em>
When stock has neither par nor stated value, the entire proceeds of issue are credited to common stock account.
JOURNAL ENTRY
Debit Cash $152,000
Credit Common stock $152,000
Being Issue of 19,000 common stock at neither par nor stated value
<em>2. The stock has a $2 par value</em>
Compute the par value, any excess of issue proceed over par value is credited to 'additional paid-in capital' account or any shortage is debited to 'discount on common stock' account.
Par Value = Number of shares issued X Par value
Par Value = 19,000 X $2 = $38,000
Additional paid-in capital = Issued value - Par Value
= $152,000 - $38,000 = $114,000
JOURNAL ENTRY
Debit Cash $152,000
Credit Common stock $38,000
Credit Additional paid-in capital $114,000
Being Issue of 19,000 common stock at $2 par value
<em>3. The stock has a $5 stated value.
</em>
First compute the par value as in 2 above
Par Value = Number of shares issued X Par value
Par Value = 19,000 X $5 = $95,000
Additional paid-in capital = Issued value - Par Value
= $152,000 - $95,000 = $57,000
JOURNAL ENTRY
Debit Cash $152,000
Credit Common stock $95,000
Credit Additional paid-in capital $57,000
Being Issue of 19,000 common stock at $5 stated value
Note, the amount that goes to the common stock account must be par value of share issued.
