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Journal entries are described as follows:
- The journal entry for preferred stock is recorded as a debit to cash by $680,000 and credit to preferred stock by $500,000 and the rest of the amount is transferred to additional capital at $180,000 and the journal entry for common stock with no stated value is recorded as a debit to cash and credit to common stock with equal amounts of $180,000.
- The journal entry for common stock at stated value is recorded as a debit to cash by $ 180,000 and credit to common stock and additional capital with $48,000 and $132,000.
- The journal entry for common stock at modified par value is recorded as a debit to cash by $ 180,000 and credit to common stock and additional capital with $24,000 and $156,000.
What is a journal book?
A journal book is an accounting book firstly prepared by a company to record monetary transactions in a specified format.
The journal entries are recorded as follows:
Date Particulars Debit (in $) Credit (in $)
A) Cash (10,000 X $68) 680,000
Preferred stock (10,000 X $50) 500,000
Additional capital (10,000 X $18) 180,000
(To record the issue of preferred stock)
Cash (12,000 X $15) 180,000
Common stock 180,000
(To record the issue of common stock
with no stated value)
B) Cash (12,000 X $15) 180,000
Common stock (12,000 X $4) 48,000
Additional capital (12,000 X $11 ) 132,000
(To record the issue of common stock
with stated value at $4 per share)
C) Cash (12,000 X $15) 180,000
Common stock (12,000 X $2) 24,000
Additional capital (12,000 X $13 ) 156,000
(To record the issue of common stock
with par value at $2 per share)
Therefore, the journal entries are recorded as mentioned and explained above.
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