Question

On April 1, 10,000 shares of $8 par common stock were issued at $26, and on April 7, 6,000 shares of $80 par preferred stock were issued at $108.

Journalize the entries for April 1 and 7. If an amount box does not require an entry, leave it blank.

Apr. 1
Apr. 7

Answer 1

Date	Account	Debit ($)	Credit ($)
Apr 1	Cash Dr (10000 shares x $ 26)	260000
	To Common stock ( 10000 shares x $8)		80000
	To Paid in capital in excess of par - Common stock (balancing figure)		180000
	(being 10,000 shares of $8 par common stock were issued at $26)
Apr 7	Cash Dr ( 6000 shares x $ 108)	648000
	To Preferred Stock ( 6000 shares x $ 80)		480000
	To Paid in capital in excess of par - Preferred stock (balancing figure)		168000
	(being 6,000 shares of $80 par preferred stock were issued at $108)

A company issues its shares at a premium when the price at which it sells the shares is higher than their par value.The amount of the premium is the difference between the par value and the selling price