Question

Prepare the issuer's journal entry for each of the following separate transactions. a. On March 1, Atlantic Co. issues 52,000 shares of $5 par value common stock for $326,000 cash. b. On April 1, OP Co. issues no-par value common stock for $89,000 cash. c. On April 6, MPG Issues 3,900 shares of $25 par value common stock for $58,000 of inventory, $180,000 of machinery, and acceptance ofa $94,000 note payable.

Answer 1

Ans. A	Date	General Journal	Debit	Credit
	1-Mar	Cash	$326,000
		Common stock (52,000 * $5)		$260,000
		Paid in capital in excess of par		$66,000
		(Common shares issued on premium)
	*Paid in capital in excess of par value = $326,000 - $260,000 = $66,000
Ans. B	Date	General Journal	Debit	Credit
	1-Apr	Cash	$326,000
		Common stock		$260,000
		(To record no par common stock issued)
Ans. C	Date	General Journal	Debit	Credit
	6-Apr	Inventory	$58,000
		Machinery	$180,000
		Common stock (3,900 * $25)		$97,500
		Paid in capital in excess of par		$46,500
		Notes payable		$94,000
		(Common stock issued against inventory, machinery and notes payable)
	*Paid in capital in excess of par value = $58,000 + $180,000 - $97,500 - $94,000 = $46,500