On 12/31/16, ABC issued 10,000 shares of $1 par value common stock at the closin

Question

On 12/31/16, ABC issued 10,000 shares of $1 par value common stock at the closing market price of $10 per share. Prepare ABC's journal entry to reflect the issuance of the stock on 12/31/16. To refresh your memory, a Paid-in Capital in Excess of Par account should be used to account for excess proceeds over par value in a stock issuance transaction. (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.) On 12/31/16, ABC issued 10,000 shares of $1 par value common stock at the closing market price of $10 per share. Prepare ABC's journal entry to reflect the issuance of the stock on 12/31/16. To refresh your memory, a Paid-in Capital in Excess of Par account should be used to account for excess proceeds over par value in a stock issuance transaction. (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.)

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit 12/31/16 Cash 100000 Common stock 10000 Paid in capital in excess of par value 90000 (To record issue common stock)

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