Answer:
(a)
Jan 10
Debit: Cash $480,000
Credit: Common Stock $400,000
Credit: Paid in Capital $80,000
Mar 1
Debit: Accounts Payable $35,000
Credit: Common Stock $25,000
Credit: Paid in Capital $10,000
July 1
Debit: Cash $240,000
Credit: Common Stock $150,000
Credit: Paid in Capital $90,000
Sept 1
Debit: Cash $600,000
Credit: Common Stock $300,000
Credit: Paid in Capital $300,000
(b)
Jan 10
Debit: Cash $480,000
Credit: Common Stock $240,000
Credit: Additional Paid in Capital $240,000
Mar 1
Debit: Accounts Payable $35,000
Credit: Common Stock $15,000
Credit: Additional Paid in Capital $20,000
July 1
Debit: Cash $240,000
Credit: Common Stock $90,000
Credit: Additional Paid in Capital $150,000
Sept 10
Debit: Cash $600,000
Credit: Common Stock $180,000
Credit: Additional Paid in Capital $420,000
Step-by-step explanation:
(a)
Jan 10
Debit: Cash (80,000 shares x $6 per share) $480,000
Credit: Common Stock (80,000 shares x $5 per share) $400,000
Credit: Paid in Capital (80,000 shares x $1 per share) $80,000
To Record Issuance of 80,000 shares at $6 per share par value.
Mar 1
Debit: Accounts Payable (5,000 shares x $7 per share) $35,000
Credit: Common Stock (5,000 shares x $5 per share) $25,000
Credit: Paid in Capital (5,000 shares x $2 per share) $10,000
To Record Issuance of 5,000 shares at $7 per share and excess paid in Capital in terms of Par Value to attorneys in payment of a bill.
July 1
Debit: Cash (30,000 shares x $8 per share) $240,000
Credit: Common Stock (30,000 shares x $5 per share) $150,000
Credit: Paid in Capital (30,000 shares x $3 per share) $90,000
To Record Issuance of 30,000 shares at $8 per share par value.
Sept 1
Debit: Cash (60,000 shares x $10 per share) $600,000
Credit: Common Stock (60,000 shares x $5 per share) $300,000
Credit: Paid in Capital (60,000 shares x $5 per share) $300,000
To Record Issuance of 60,000 shares at $10 per share par value.
(b)
Jan 10
Debit: Cash (80,000 shares x $6 per share) $480,000
Credit: Common Stock (80,000 shares x $3 per share) $240,000
Credit: Additional Paid in Capital (80,000 shares x $3 per share) $240,000
To Record Issuance of 80,000 shares of no-par common stock with $3 stated value for $6 per share.
In the above scenario, the legal capital of company would be $240,000, because no-par common stock has a stated value.
Mar 1
Debit: Accounts Payable (5,000 shares x $7 per share) $35,000
Credit: Common Stock (5,000 shares x $3 per share) $15,000
Credit: Additional Paid in Capital (5,000 shares x $4 per share) $20,000
To Record Issuance of 5,000 shares of no-par common stock with $3 stated value for $7 per share and excess paid in capital in terms of payment of a bill.
In the above scenario, the legal capital of company would be $15,000, because no-par common stock has a stated value.
July 1
Debit: Cash (30,000 shares x $8 per share) $240,000
Credit: Common Stock (30,000 shares x $3 per share) $90,000
Credit: Additional Paid in Capital (30,000 shares x $5 per share) $150,000
To Record Issuance of 30,000 shares of no-par common stock with $3 stated value for $8 per share.
In the above scenario, the legal capital of company would be $90,000, because no-par common stock has a stated value.
Sept 10
Debit: Cash (60,000 shares x $10 per share) $600,000
Credit: Common Stock (60,000 shares x $3 per share) $180,000
Credit: Additional Paid in Capital (60,000 shares x $7 per share) $420,000
To Record Issuance of 60,000 shares of no-par common stock with $3 stated value for $10 per share.
In the above scenario, the legal capital of company would be $180,000, because no-par common stock has a stated value.