A company issues 1,030 shares of its common stock for $30,900 cash. Prepare journal entries to record this event under each of the following separate situations.The stock has neither par value nor stated value.The stock has a $1 stated value.The stock has a $2 par value.
Question
A company issues 1,030 shares of its common stock for 1 stated value.The stock has a $2 par value.
Solution
Situation 1: The stock has neither par value nor stated value. In this case, the entire proceeds will be credited to common stock. The journal entry would be:
Debit: Cash 30,900
Situation 2: The stock has a $1 stated value. In this case, the stated value is credited to common stock and the excess is credited to additional paid-in capital. The journal entry would be:
Debit: Cash 1,030 (1,030 shares * 29,870 (1,030)
Situation 3: The stock has a $2 par value. In this case, the par value is credited to common stock and the excess is credited to additional paid-in capital. The journal entry would be:
Debit: Cash 2,060 (1,030 shares * 28,840 (2,060)
Similar Questions
A company issues 10,000 shares of $0.05 par value common stock for $25 per share. Which of the following is recorded at issuance?Multiple ChoiceCredit Common Stock for $500.Credit Additional Paid-In Capital for $500.Credit Additional Paid-In Capital for $250,000.Credit Common Stock for $250,000.
A company issues 1 million shares of common stock with a par value of $0.11 for $15.90 a share. The entry to record this transaction includes a debit to Cash for:Multiple Choice$110,000 and a credit to Common Stock for $110,000.$15,900,000 and a credit to Common Stock for $15,900,000.$15,900,000, a credit to Common Stock for $110,000, and a credit to Additional Paid-in Capital for $15,790,000.$110,000, a debit to Capital Receivable for $15,790,000, a credit to Common Stock for $110,000, and a credit to Additional Paid-in Capital for $15,790,000.
A company reported the following stockholders’ equity on January 1 of the current year:Common stock–$10 par value, 1,000,000 shares authorized; 270,000 shares issued $ 2,700,000Paid-in capital in excess of par value, common stock 1,280,000Retained earnings 1,695,000Total stockholders’ equity $ 5,675,000Prepare journal entries for the following selected transactions.March 1 Purchased 12,000 shares of its own stock for $25 cash per share.May 5 Sold 6,000 shares of its treasury stock for $25 cash per share.October 12 Sold 4,000 shares of its treasury stock for $26 cash per share.
Prepare the issuer's journal entry for each of the following separate transactions.On March 1, Atlantic Company issues 44,000 shares of $5 par value common stock for $302,000 cash.On April 1, OP Company issues no-par value common stock for $73,000 cash.On April 6, MPG issues 2,300 shares of $15 par value common stock for $42,000 of inventory, $150,000 of machinery, and acceptance of a $92,000 note payable.
Information concerning common stock as of November 30, the end of the company’s current fiscal year, is presented below.Number of shares outstanding460,000Par value per share$ 5.00Dividends paid per share in current year6.00Market price per share54.00Basic earnings per share18.00Diluted earnings per share12.00The price-earnings ratio for the common stock is
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.