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ICOT Industries issued 27 million of its $1 par common shares for $488 million on April 11. Legal, promotional, and accounting services necessary to effect the sale cost $2 million.

Respuesta :

To prepare the journal entry to record the issuance of the shares. Costs being reduce by the stock issue is the amount that is otherwise recorded as PIC in excess of par. Therefore

Cash 424

Common stock (15 million x $1) 15

PIC in excess of par(Plug) 409

(to record the sale of the stock)

PIC in excess of par 2

(to record the stock issue costs)

Note: These two entries can also be combined as one.

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