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

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

1.   
A corporation issued 5,000 shares of $20 par value common stock for $120,000 cash.

2.   
A corporation issued 2,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $57,000. The stock has a $2 per share stated value.

3.   
A corporation issued 2,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $57,000. The stock has no stated value.

4.   
A corporation issued 1,250 shares of $75 par value preferred stock for $150,750 cash.

Answer
 


Explanation:
1.

Common Stock, $20 Par Value = 5,000 shares × $20 per share = $100,000

Paid in capital in excess of par value, common Stock = $120,000 – $100,000 = $20,000


4.

Preferred Stock, $75 Par Value = 1,250 shares × $75 per share = $93,750
Paid in capital in excess of par value, preferred Stock = $150,750 – $93,750 = $57,000