Question

Rodriguez Corporation issues 8,000 shares of its common stock for $50,000 cash on February 20. Prepare journal entries to record this event under each of the following separate situations. 1. The stock has a $2 par value. 2. The stock has neither par nor stated value. 3. The stock has a $1 stated value.

Answer 1

Solution:

1.Cash a/c                                                        Dr        $50,000

To common stock                                                       $32000 (8000*4)

To paid in capital in excess of par-common stock   $18,000

2.Cash a/c                                                       Dr    $50,000

To common stock                                                    $50,000

3.Cash a/c                                                       Dr   $50,000

To common stock                                           $16000(8000*2)

To paid in capital in excess of stated value-common stock $34,000