Answer:
1. Debit Cash $152,000
Credit Common stock $152,000
Being Issue of 19,000 common stock at neither par nor stated value
2. Debit Cash $152,000
Credit Common stock $38,000
Credit Additional paid-in capital $114,000
Being Issue of 19,000 common stock at $2 par value
3. Debit Cash $152,000
Credit Common stock $95,000
Credit Additional paid-in capital $57,000
Being Issue of 19,000 common stock at $5 stated value
Step-by-step explanation:
1. The stock has neither par nor stated value
When stock has neither par nor stated value, the entire proceeds of issue are credited to common stock account.
JOURNAL ENTRY
Debit Cash $152,000
Credit Common stock $152,000
Being Issue of 19,000 common stock at neither par nor stated value
2. The stock has a $2 par value
Compute the par value, any excess of issue proceed over par value is credited to 'additional paid-in capital' account or any shortage is debited to 'discount on common stock' account.
Par Value = Number of shares issued X Par value
Par Value = 19,000 X $2 = $38,000
Additional paid-in capital = Issued value - Par Value
= $152,000 - $38,000 = $114,000
JOURNAL ENTRY
Debit Cash $152,000
Credit Common stock $38,000
Credit Additional paid-in capital $114,000
Being Issue of 19,000 common stock at $2 par value
3. The stock has a $5 stated value.
First compute the par value as in 2 above
Par Value = Number of shares issued X Par value
Par Value = 19,000 X $5 = $95,000
Additional paid-in capital = Issued value - Par Value
= $152,000 - $95,000 = $57,000
JOURNAL ENTRY
Debit Cash $152,000
Credit Common stock $95,000
Credit Additional paid-in capital $57,000
Being Issue of 19,000 common stock at $5 stated value
Note, the amount that goes to the common stock account must be par value of share issued.