Question

Exercise 11-3 Recording stock issuances LO P1

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

A corporation issued 7,000 shares of $10 par value common stock for $84,000 cash.

A corporation issued 3,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,000. The stock has a $1 per share stated value.

A corporation issued 3,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,000. The stock has no stated value.

A corporation issued 1,750 shares of $50 par value preferred stock for $136,500 cash.

Answer 1

Journal entry :

Date	accounts & explanation	debit	credi
	Cash	84000
	Common Stock (7000*10)		70000
	Paid in capital in excess of par value-Common Stock		14000
	(To record issue common stock)
	Organisation fees	49000
	Common Stock		3500
	Paid in capital in excess of Stated value-Common Stock		45500
	(To record Common Stock)
	Organisation fees	49000
	Common Stock		49000
	(To record common Stock)
	Cash	136500
	Preferred Stock (1750*50)		87500
	Paid in capital in excess of par value-preferred Stock		49000
	(To record issue preferred Stock)