Prepare journal entries to record the following four separate issuances of stock
ID: 2420002 • Letter: P
Question
Prepare journal entries to record the following four separate issuances of stock. A corporation issued 2.000 shares of $20 par value common stock for $48.000 cash. A corporation issued 1,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $29,500. The stock has a $3 per share stated value. A corporation issued 1,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $29,500. The stock has no stated value. A corporation issued 500 shares of $100 par value preferred stock for S79.500 cash.Explanation / Answer
1) Cash $48,000 Common stock $40,000 Additional paid in capital - common stock $ 8,000 (2000 x $20) = 40,000 & 48000 - 40000 = 8000 paid in capital 2) Organisation cost $29,500 Common stock $ 3,000 Additional paid in capital - common stock $26,500 (3 x 1000 )=3000 common stock, 29500-3000 = 26500 additional paid in capital 3) Organisation cost $29,500 Common stock $29,500 to record 1000 shares issued with no par and stated value 4) Cash $79,500 Preferred stock $50,000 Additional paid in capital - Preferred stock $29,500 500 x 100 = 50000 , 79500 - 50000 = 29500