Question

Item 4 Item 4 Prepare journal entries to record each of the following four separate issuances of stock. A corporation issued 4,000 shares of $10 par value common stock for $48,000 cash. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,500. The stock has a $2 per share stated value. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,500. The stock has no stated value. A corporation issued 1,000 shares of $25 par value preferred stock for $65,500 cash.

Answer 1

Journal entries

No	Account and explanation	debit	credit
a	Cash	48000
	Common Stock		40000
	Paid in capital in excess of par value-Common Stock		8000
	(To record issue common Stock)
b	Organisation expense	40500
	Common Stock (2000*2)		4000
	Paid in capital in excess of stated value-Common Stock		36500
	(To record issue common Stock)
c	Organisation expense	40500
	Common Stock		40500
	(To record issue common Stock)
d	Cash	65500
	Preferred stock (1000*25)		25000
	Paid in capital in excess of par value-Preferred stock		40500
	(To record issue preferred stock)