Answer:
Osage Corporation
Journal Entries for the Issuance of 2,000 Shares under the following assumptions:
(a) The stock had a par value of $5 per share and was issued for a total of $52,000.
Debit Cash Account $52,000
Credit Common Stock $10,000
Credit Additional Paid-in Capital $42,000
To record the issuance of 2,000 shares of Common Stock, par $5 for a total of $52,000.
(b) The stock had a stated value of $5 per share and was issued for a total of $52,000:
Debit Cash Account $52,000
Credit Common Stock $10,000
Credit Additional Paid-in Capital $42,000
To record the issuance of 2,000 shares of Common Stock, stated value of $5 for a total of $52,000.
(c) The stock had no par or stated value and was issued for a total of $52,000.
Debit Cash Account $52,000
Credit Common Stock $52,000
To record the issuance of 2,000 shares of Common Stock, with no par, for a total of $52,000.
Explanation:
Shares can be issued at par and above the par value. A stated value is an amount assigned to a corporation's stock for internal accounting purposes when the stock has no par value. Like par value, stated value is nominal, typically between $0.01 and $1.00.
If no-par value stock does not have a stated value, the entire proceeds from the issuance of the stock become legal capital.
