Answer:
The journal entry for sale of the stock is shown below:
Explanation:
Cash A/c................................................................................Dr $23,600,000
Common Stock A/c....................................................................Cr $4,000,000
Paid in Capital in Excess of Par: Common Stock A/c.........Cr $19,600,000
As the common stock are issued.
Stock Issue Expense A/c............Dr $4,000,000
Cash A/c...................................Cr $4,000,000
As stock issue expense is incurred.
Working Note:
Common Stock = Number of stock sold × Par Value
= 4,000,000 × $1
= $4,000,000
Paid in Capital in Excess of Par: Common Stock = Amount received - Common Stock
= $23,600,000 - $4,000,000
= $19,600,000
