Question

Share Issuances for Cash

Minaret, Inc., issued 10,000 shares of $50 par value preferred stock at $68 per share and 12,000 shares of no-par value common stock at $15 per share. The common stock has no stated value. All issuances were for cash.

a. Prepare the journal entries to record the share issuances.
b. Prepare the journal entry for the issuance of the common stock assuming that it had a stated value of $4 per share.
c. Prepare the journal entry for the issuance of the common stock assuming that it had a par value of $2 per share.

General Journal
Ref.	Description	Debit	Credit
a.	AnswerCashCommon StockNo-Par Value Common StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value-Preferred StockPaid-in-Capital in Excess of Stated Value - Common StockPreferred Stock	Answer	Answer
	Preferred Stock	Answer	Answer
	AnswerCashCommon StockNo-Par Value Common StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value-Preferred StockPaid-in-Capital in Excess of Stated Value - Common StockPreferred Stock	Answer	Answer
	Issued 10,000 shares of preferred stock.
	AnswerCashCommon StockNo-Par Value Common StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value-Preferred StockPaid-in-Capital in Excess of Stated Value - Common StockPreferred Stock	Answer	Answer
	AnswerCashCommon StockNo-Par Value Common StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value-Preferred StockPaid-in-Capital in Excess of Stated Value - Common StockPreferred Stock	Answer	Answer
	Issued 12,000 shares of no-par value common stock.
b.	AnswerCashCommon StockNo-Par Value Common StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value-Preferred StockPaid-in-Capital in Excess of Stated Value - Common StockPreferred Stock	Answer	Answer
	Common Stock	Answer	Answer
	AnswerCashCommon StockNo-Par Value Common StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value-Preferred StockPaid-in-Capital in Excess of Stated Value - Common StockPreferred Stock	Answer	Answer
	Issued 12,000 shares of no-par common stock, statedvalue of $4, at $15 per share.
c.	AnswerCashCommon StockNo-Par Value Common StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value-Preferred StockPaid-in-Capital in Excess of Stated Value - Common StockPreferred Stock	Answer	Answer
	Common Stock	Answer	Answer
	AnswerCashCommon StockNo-Par Value Common StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value-Preferred StockPaid-in-Capital in Excess of Stated Value - Common StockPreferred Stock	Answer	Answer
	Issued 12,000 sharesat $2 par value common stock at$15 per share.

Answer 1

Journal entries
S.no.	Accounts Title and explanation	Debit	Credit
a	Cash Dr (10000*$68)	$6,80,000
	To Preferred stock (10000*$50)		$5,00,000
	To paid in capital in exces of Par -Preferred		$1,80,000
	Cash Dr (12000*15)	$1,80,000
	To common stock		$1,80,000
b	Cash Dr (12000*15)	$1,80,000
	To common stock (12000*$4)		$48,000
	To paid in capital in exces of Sated value -common		132000
c	Cash Dr (12000*15)	$1,80,000
	To common stock (12000*$2)		$24,000
	To paid in capital in exces of Par value -common		156000