Question

During its first year of operations, Pina Corporation had the following transactions pertaining to its common stock.

Jan. 10		Issued 84,800 shares for cash at $6 per share.
Mar. 1		Issued 5,000 shares to attorneys in payment of a bill for $37,000 for services rendered in helping the company to incorporate.
July 1		Issued 32,700 shares for cash at $8 per share.
Sept. 1		Issued 61,700 shares for cash at $10 per share.

(a)		Prepare the journal entries for these transactions, assuming that the common stock has a par value of $4 per share.
(b)		Prepare the journal entries for these transactions, assuming that the common stock is no-par with a stated value of $2 per share.

Answer 1

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Naming convention in not available, can be slightly different: Solution: a) Journal entries -Par Value Date Account title and explanation Debit Credit (84800%) (84800*4) Jan.10 Cash 508800 Common stock Additional Paid-in Capital (or paid in capital in excess of par) To record the issuance of common stock) 339200 169600 Mar.01 Organization Expense 37000 Common stock Additional Paid-in Capital (or paid in capital in excess of par) To record the issuance of common stock) (5000*4) 20000 17000 (32700*8) (32700*4) ul.01 Cash 261600 Common stock Additional Paid-in Capital (or paid in capital in excess of par) To record the issuance of common stock) 130800 130800 Sep.01 Cash (61700*10) (61700#4) 617000 Common stock Additional Paid-in Capital (or paid in capital in excess of par) To record the issuance of common stock) 246800 370200

b) Journal entries No-Par Value Date Account title and explanation Debit Credit Jan.10 Cash (84800%) (84800*2) 508800 Common stock Paid-in Capital in Exess of Stated Value CS To record the issuance of common stock) 169600 339200 Mar.01 Organization Expense 37000 Common stock Paid-in Capital in Exess of Stated Value CS To record the issuance of common stock) (5000*2) 10000 27000 ul.01 Cash (32700*8) (32700 *2) 261600 Common stock Paid-in Capital in Exess of Stated Value CS To record the issuance of common stock) 65400 196200 Sep.01 Cash (61700*10) (61700 *2) 617000 Common stock Paid-in Capital in Excess of Stated Value CS To record the issuance of common stock) 123400 493600