Question

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

A corporation issued 4,000 shares of $20 par value common stock for $96,000 cash.

A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $26,500. The stock has a $1 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 $26,500. The stock has no stated value.

A corporation issued 1,000 shares of $25 par value preferred stock for $51,500 cash.

Answer 1

Journal entries

No	account and explanation	Debit	Credit
a	Cash	96000
	Common Stock		80000
	Paid in Capital in excess of par value-Common Stock		16000
b	Organisation expense	26500
	Common Stock		2000
	Paid in Capital in excess of stated value-Common Stock		24500
c	Organisation expense	26500
	Common Stock		26500
d	Cash	51500
	Preferred stock		25000
	Paid in Capital in excess of par value-Preferred stock		26500