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Prepare journal entries to record the following four separate issuances of stock.
A. A corporation issued 7,000 shares of $10 par value common stock for $84,000 cash.
B. A corporation issued 3,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,000. The stock has a $1 per share stated value.
C. A corporation issued 3,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,000. The stock has no stated value.
D. A corporation issued 1,750 shares of $50 par value preferred stock for $136,500 cash.

Respuesta :

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Explanation:

  • A.

                                                                    Debit            Credit

Cash                                                         $84,000

Common stock                                                                 $70,000

Paid-In Capital in Excess of Par Value                             $14,000

It's necessary to split the equity in two accounts because there is information about the par value

  • B.

Promotion Expenses                                $49,000

Common Stock                                                                  $3,500

Paid-In Capital in Excess of Par Value                             $45,500

It's necessary to split the equity in two accounts because there is information about the par value

  • C

Promotion Expensese                               $49,000

Common Stock                                                                   $49,000

It's not necessary to split the equity in two accounts because there is no information about the par value

  • D.

Cash                                                            $136,500

Preferred Stock                                                                   $87,500

Paid-In Capital in Excess of Par Value                                $49,000

It's necessary to split the equity in two accounts because there is information about the par value

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