Exercise 11-3 Recording stock issuances LO P1 Prepare journal entries to record
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Question
Exercise 11-3 Recording stock issuances LO P1
Prepare journal entries to record the following four separate issuances of stock.
A corporation issued 7,000 shares of $10 par value common stock for $84,000 cash.
A corporation issued 3,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,000. The stock has a $1 per share stated value.
A corporation issued 3,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,000. The stock has no stated value.
A corporation issued 1,750 shares of $50 par value preferred stock for $136,500 cash.
Explanation / Answer
Journal entry :
Date accounts & explanation debit credi Cash 84000 Common Stock (7000*10) 70000 Paid in capital in excess of par value-Common Stock 14000 (To record issue common stock) Organisation fees 49000 Common Stock 3500 Paid in capital in excess of Stated value-Common Stock 45500 (To record Common Stock) Organisation fees 49000 Common Stock 49000 (To record common Stock) Cash 136500 Preferred Stock (1750*50) 87500 Paid in capital in excess of par value-preferred Stock 49000 (To record issue preferred Stock)Related Questions
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