Question

During its first year of operations, Bebo's Corporation had the following transactions pertaining to its common stocks:

Jan 10: Issued 90,000 shares for cash at $10 per share

July 1: issued 50,000 shares for cash at $20 per share

Instructions

(a) Journalize the transactions, assuming that the common stock has a par value of $10 per per share.

(b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $5 per share.

Answer 1

a
Date	Account Titles and Explanation	Debit	Credit
Jan 10	Cash	900000		=90000*10
	Common stock		900000
July 1	Cash	1000000		=50000*20
	Common stock		500000	=50000*10
	Paid in Capital in excess of par-Common stock		500000

b
Date	Account Titles and Explanation	Debit	Credit
Jan 10	Cash	900000
	Common stock		450000	=90000*5
	Paid in Capital in excess of stated value-Common stock		450000
July 1	Cash	1000000
	Common stock		250000	=50000*5
	Paid in Capital in excess of stated value-Common stock		750000