Exercise 12-4 Prepare entries for stock issuance (L.O.5) Thore Company issued 30
ID: 2579110 • Letter: E
Question
Exercise 12-4 Prepare entries for stock issuance (L.O.5) Thore Company issued 30,000 shares of $20 par value common stock for $680,000. What is the journal entry for this transaction? What would the journal entry be if the common stock had no-par or stated value? Exercise 12-5 Journalize stock issuance for property (L.O.5) Li & Tu, Inc., needed land for a plant site. It issued 100 shares of $480 par value common stock to the incorporators of their corporation in exchange for land, which cost S56,000 one year ago. Experienced appraisers recently valued the land at $72,000. What journal entry would be appropriate to record the acquisition of the land?Explanation / Answer
Answer to 12-4
Journal entry when the stocks were issued at par value:
Cash Dr. $680000
Paid in Capital in excess of par - common stock Cr. $80000
Common Stock Cr. $600000
When issued with no par or stated value, the journal is:
Cash Dr. $680000
Common Stock Cr. $680000
Answer to 12-5
The land value will be taken as $72000, that is the appraised value by the experienced valuers at the time of purchasing the land by iussuing common stock.
Land Dr. $72000
Paid in Capital in excess of par - common stock Cr. $24000
Common Stock Cr. $48000
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