Question

Stock: E Corporation issued 20,000 shares of $50 Par Common Stock for cash at $60 per share. Journalize the entry to

record the issuance of Common Stock. (dr) for debit; (cr) for credit.

Answer 1

Ans.	Transaction	General Journal	Debit	Credit
	1	Cash	$1,200,000
		Common stock		$1,000,000
		Additional paid in caital		$200,000
		(To record issuance of stock on excess of par)
	*CALCULATIONS:
	*Cash = Number of shares issued * Issue price
		20,000 * $60
		$1,200,000
	*Common stock = Number of shares issued * Par value
		20,000 * $50
		$1,000,000
	Additional paid in capital   =   Cash - Common stock
		$1,200,000 - $1,000,000
		$200,000