Question

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

1. A corporation issued 5,000 shares of $20 par value common stock for $120,000 cash.

2. A corporation issued 2,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $34,000. The stock has a $1 per share stated value.

3. A corporation issued 2,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $34,000. The stock has no stated value.

4. A corporation issued 1,250 shares of $25 par value preferred stock for $65,250 cash.

Answer 1

Transaction No.	Accounts Title & Explanation	Debit ($)	Credit ($)
1	Cash	120,000
	Common Stock - $20 Par		100,000
	Additional Paid - in - Capital in Excess of Par		20,000
	(To record issue of common stock )
2	Cash	34,000
	Common Stock - $1 Stated		2,500
	Additional Paid - in - Capital in Excess of Stated		31,500
	(To record issue of common stock to promoters)
3	Organization Expenses	34,000
	Common Stock		34,000
	(To record issue of common stock in exchange of organization expenses)
4.	Cash	65,250
	Preferred Stock - $25 Par		31,250
	Additional Paid - in - Capital in Excess of Par (Preferred)		34,000
	(To record issue of Preferred stock )