Question

Rodriguez Corporation issues 19,000 shares of its common stock for $78,800 cash on February 20. Prepare journal entries to record this event under each of the following separate situations.

1. The stock has a $2 par value.
2. The stock has neither par nor stated value.
3. The stock has a $1 stated value.

Answer 1

The journal entries are shown below:

Step-by-step explanation:

The journal entries are as follows

1. Cash $78,800

To Common stock $38,000 (19,000 shares × $2)

To Additional paid in capital in excess of par- common stock $40,800

(Being the issuance of the common stock is recorded)

2. Cash $78,800

To Common stock $78,800

(Being the issuance of the common stock is recorded)

3. Cash $78,800

To Common stock $19,000 (19,000 shares × $1)

To Additional paid in capital in excess of par- common stock $59,800

(Being the issuance of the common stock is recorded)