Question

Prepare journal entries to record each of the following four separate issuances of stock.

1. A corporation issued 8,000 shares of $30 par value common stock for $288,000 cash.
2. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $36,500. The stock has a $1 per share stated value.
3. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $36,500. The stock has no stated value.
4. A corporation issued 2,000 shares of $50 par value preferred stock for $136,500 cash.

transaction	general journal	debit	credit
1
2
3
4

Answer 1

Ans:

No	Account	Debit	Credit
1	Cash	288,000
	Common stock, $30 par (8,000*30)		240,000
	Paid in capital in excess of par, common stock		48,000
2	Organization expenses	36,500
	Common stock, $1 stated value (4,000*1)		4,000
	Paid in capital in excess of stated value, common stock		32,500
3	Organization expenses	36,500
	Common stock, no par		36,500
4	Cash	136,500
	Preferred stock, $50 par (2000*50)		100,000
	Paid in capital in excess of par, preferred stock		36,500

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