Question

Prepare the issuer's journal entry for each of the following separate transactions. On March 1, Atlantic Co. issues 44,500 shares of $3 par value common stock for $303,500 cash. On April 1, OP Co. issues no-par value common stock for $74,000 cash. On April 6, MPG issues 2,400 shares of $20 par value common stock for $43,000 of inventory, $155,000 of machinery, and acceptance of a $93,000 note payable.

Answer 1

Answer and Explanation:

The journal entries are shown below;

On March 1

Cash A/c $303,500

     To Common Stock $3 Par value (44,500 × $3) $133,500

       To Paid in capital in excess of par value $170,000

(Being the common stock issued is recorded)

On April 1

Cash $74,000

      To Common Stock, no par value $74,000

(Being the common stock issued is recorded)

On April 6

Inventory $43,000

Machinery $155,000

 To Common Stock (2,400 ×$20) $48,000

 To Notes payable $93,000

  To Paid in capital in excess of par value $57,000

(Being the shares are issued)