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Prepare journal entries to record the following four separate issuances of stock.

1. A corporation issued 4,000 shares of $5 par value common stock for $35,000 cash.

Record the issue of 4,000 shares of $5 par value common stock for $35,000 cash.2. A corporation issued 2,000 shared of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has a $1 per share stated value.

Record the issue of 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has a $1 per share stated value.3. A corportation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has stated no value.

Record the issue of 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has no stated value.4. A corporation issued 1,000 shares of $50 par value preferred stock for $60,000 cash.

Record the issue of 1,000 shares of $50 par value preferred stock for $60,000 cash.

Respuesta :

Answer:

Explanation:

The journal entries are shown below:

1.  Cash A/c Dr $35,000        

           To Common Stock $20,000          (4,000 shares  × $5)

           To  Additional Paid-in Capital in excess of par - Common Stock $15,000

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

2. Promotion expenses A/c Dr $40,000

             To Common Stock $2,000          (2,000 shares  × $1)

             To  Additional Paid-in Capital in excess of par - Common Stock $15,000

(Being the issuance of stock is recorded to promoters and the remaining balance is credited to the additional paid-in capital account)

3. Promotion expenses A/c Dr $40,000

             To Common Stock $40,000

(Being the shares are issued to promoters)

4.  Cash A/c Dr $60,000

           To Preferred Stock $50,000          (1,000 shares  × $50)

           To  Additional Paid-in Capital in excess of par - Preferred Stock $10,000

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

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