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Moonwalker Corporation issued 2,000 shares of its $10 par value common stock for $60,000. Moonwalker also...

Moonwalker Corporation issued 2,000 shares of its $10 par value common stock for $60,000. Moonwalker also incurred $1,500 of costs associated with issuing the stock. If you record the transaction with one journal entry that Debits Cash for $58,500 ($60,000 - 1,500), then what would be the adjustment to PIC in excess ofpar - CS?

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Answer #1

Paid in capital in excess of par = 60000 - (10*2000) - 1500 = $38,500

Adjustment to PIC in excess ofpar - CS would be:

Credit PIC in excess of par - CS $38,500.

The single journal entry would be:

(Dr.) Cash 58,500
(Cr.) CS 20,000
(Cr.) PIC in excess of par - CS 38,500

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