Question

During its first year of operations, Whispering Winds Corp. had these transactions pertaining to its common stock. Jan. 10 Issued 26, 600 shares for cash at $6 per share. July 1 Issued 58,000 shares for cash at $7 per share. (a) Journalize the transactions, assuming that the common stock has a par value of $6 per share. (b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Journal entries for Whispering Winds Corp. pertain to issuing common stock with a par value of $6 per share and no-par common stock with a stated value of $1 per share.

Step-by-step explanation:

To journalize the transactions for Whispering Winds Corp. when the common stock has a par value of $6 per share, we use the following journal entries:

• Jan. 10: Cash (26,600 shares x $6) = $159,600 | Common Stock (26,600 shares x $6) = $159,600
• July 1: Cash (58,000 shares x $7) = $406,000 | Common Stock (58,000 shares x $6) = $348,000 | Paid-in Capital in Excess of Par – Common Stock = $58,000

For the second scenario, assuming that the common stock is no-par with a stated value of $1 per share, the entries would be:

• Jan. 10: Cash (26,600 shares x $6) = $159,600 | Common Stock (26,600 shares x $1) = $26,600 | Paid-in Capital in Excess of Stated Value – Common Stock = $133,000
• July 1: Cash (58,000 shares x $7) = $406,000 | Common Stock (58,000 shares x $1) = $58,000 | Paid-in Capital in Excess of Stated Value – Common Stock = $348,000