Issuance of Stock Sussex Company is authorized to issue 100,000 shares of common

Question

Issuance of Stock

Sussex Company is authorized to issue 100,000 shares of common stock. On August 1, the company issued 5,000 shares at $25 per share.

1. Prepare a journal entry to record the issuance of stock for cash under the assumption the stock has a par value of $25.

Aug. 1

  

  

  

  

Issued 5,000 shares of $25 par value common stock for $25 per share

2. Prepare a journal entry to record the issuance of stock for cash under the assumption the stock has a par value of $10. If an amount box does not require an entry, leave it blank.

Aug. 1

  

  

  

  

  

  

  

  

  

Issued 5,000 shares of $10 par value common stock for $25 per share

3. Prepare a journal entry to record the issuance of stock for cash under the assumption the stock has no par value.

Aug. 1

  

  

  

  

Issued 5,000 shares of no-par common stock for $25 per share

4. Prepare a journal entry to record the issuance of stock for cash under the assumption the stock has a stated value of $1 per share. If an amount box does not require an entry, leave it blank.

Aug. 1

  

  

  

  

  

  

  

  

  

Issued 5,000 shares of $1 stated value common stock for $25 per share

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1. Prepare a journal entry to record the issuance of stock for cash under the assumption the stock has a par value of $25.

Aug. 1

  

  

  

  

Issued 5,000 shares of $25 par value common stock for $25 per share

Explanation / Answer

the following are the requried journal entries:

1.

2.

3.

4.

date accounts debit credit aug 1 cash a/c $125,000 .........To Common stock a/c $125,000 (5,000 share issued for $25 each =>$125,000)

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