Question

g "Slack, Inc. had an IPO on June 1, 2019 and sold 275m shares with par value of $0.03 for $37.50/share. What is the journal entry Slack records on June 1, 2019? Group of answer choices DR Common Stock $8.25m; DR PIC-Common Stock $10,304.25m; CR Cash $10,312.50m DR Cash $10,312.50m; CR Common Stock $8.25m; CR PIC-Common Stock $10,304.25m DR Cash $10,312.50m; CR Common Stock $10,312.50m DR Common Stock $10,312.50m; CR Cash $10,312.50"

Answer 1

The correct option here is the second one,DR Cash $10,312.50m; CR Common Stock $8.25m; CR PIC-Common Stock $10,304.25m

Step-by-step explanation:

The cash realized from the initial public offer(IPO)=275 m shares*$37.50=$10,312.5 million

The par value of the 275 million shares=275 million*$0.03=$8.25 million

The paid capital in excess of par value=($37.50-$0.03)*275 million=$10,304.25 million

The appropriate accounting entries would to debit cash with total proceeds of $10,312.5 million

Credit common stock with $8.25 million

As well as crediting paid-in capital in excess of par value with $10,304.25