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To expand operations, a consulting company issued 1,900 shares of previously uni

ID: 2415249 • Letter: T

Question

To expand operations, a consulting company issued 1,900 shares of previously unissued common stock with a par value of $1. The price for the stock was $50 per share.

1-a.

Complete the table below, indicating the account, amount, and direction of the effect for the stock issuance. (Enter any decreases to account balances with a minus sign.)

Assets

=

Liabilities

+

Stockholders’ Equity

(a)

(b)

1-b.

Prepare the journal entry for the stock issuance. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Record the issuance of 1,900 shares with a $1 par value for a price of $50 per share.

2-a.

Complete the table below, indicating the account, amount, and direction of the effect for the stock issuance with a par value of $2. (Enter any decreases to account balances with a minus sign.)

Assets

=

Liabilities

+

Stockholders’ Equity

(a)

(b)

2-b.

Prepare the journal entry for the stock issuance, if the par value were $2 per share. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Record the issuance of 1,900 shares with a $2 par value for a price of $50 per share.

To expand operations, a consulting company issued 1,900 shares of previously unissued common stock with a par value of $1. The price for the stock was $50 per share.

Explanation / Answer

1 Assets = Liabilities + Stockholders’ Equity (a) Cash=$95000 + Common stock $1,900 + Paid in capital in excess $93,100 Total $95,000 1. b Account Title Dr Cr Cash (1900*50) $95,000 Common stock (1900*1) 1900 Paid in Capital in excess of par value (1900*49) 93100 2 Assets = Liabilities + Stockholders’ Equity (a) Cash=$95000 + Common stock $3,800 + Paid in capital in excess $91,200 Total $95,000 2. b Account Title Dr Cr Cash (1900*50) $95,000 Common stock (1900*2) 3800 Paid in Capital in excess of par value (1900*48) 91200

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