Question

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

1. A corporation issued 6,000 shares of $5 par value common stock for $36,000 cash.
2. A corporation issued 3,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $56,000. The stock has a $2 per share stated value.
3. A corporation issued 3,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $56,000. The stock has no stated value.
4. A corporation issued 1,500 shares of $100 par value preferred stock for $206,000 cash.

Record the issue of 6,000 shares of $5 par value common stock for $36,000 cash.

Record the issue of 3,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $56,000. The stock has a $2 per share stated value.

Record the issue of 3,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $56,000. The stock has no stated value.

Record the issue of 1,500 shares of $100 par value preferred stock for $206,000 cash.

Answer 1

a) Journal entry

Date	account and explanation	debit	credit
	Cash	36000
	Common Stock (6000*5)		30000
	Paid in capital in excess of par value-Common Stock		6000
	(To record common Stock)

b) Journal entry

Date	account and explanation	debit	credit
	Organisation fees	56000
	Common Stock		6000
	Paid in capital in excess of stated value-Common Stock		50000
	(To record common Stock)

c) Journal entry

Date	account and explanation	debit	credit
	Organisation fees	56000
	Common Stock		56000
	(To record common Stock)

d) Journal entry

Date	account and explanation	debit	credit
	Cash	206000
	Preferred Stock (1500*100)		150000
	Paid in capital in excess of par value-preferred Stock		56000
	(To record preferred Stock)