Question

Required information The following information applies to the questions displayed below. Clothing Frontiers began operations on January 1 and engages in the following transactions during the year related to stockholders' equity January 1 Issues 700 shares of common stock for $47 per share. April 1 Issues 110 additional shares of common stock for $51 per share. 2. Record the transactions, assuming Clothing Frontiers has either $1 par value or $1 stated value common stock. (If no entry is required for a particular transaction/event, select "No Journal Entry Required in the first account field.)

Answer 1

1. Date	General journal	Debit	Credit
   January 01	Share application a/c	32,900
   	Share capital a/c		700
   	Securities premium a/c		32,200

   Excess amount collected on issue of share is transferred to securities premium account which has a restricted usage.

2. Date	General journal	Debit	Credit
   April 01	Share application a/c	5,610
   	Share capital a/c		51
   	Securities premium a/c		5,559

   Same treatment as mentioned above.

Entries are made assuming only application are received and allotment is not yet done, if the shares are allotted too, then replace share application account with share allotment account. This is because the question is silent as to what is the event.