Question

Prepare journal entries to record the following four separate issuances of stock.

A corporation issued 6,000 shares of $20 par value common stock for $144,000 cash.
A corporation issued 3,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $41,000. The stock has a $1 per share stated value.
A corporation issued 3,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $41,000. The stock has no stated value.
A corporation issued 1,500 shares of $50 par value preferred stock for $116,000 cash.

Answer 1

A journal entry was prepared for the for questions given, the records entered is shown below in the explanation section

Step-by-step explanation:

Solution

JOURNAL ENTRIES

(1) Cash $144,000

Common stock (6000 *20) $120,000

Excess capital paid

(144000-120000) $24,000

(2) Organisation expense $41,000

Common stock (3000 *1) $3,000

Excess capital paid

(41000-3000) $38,000

(3) Organisation expense $41,000

common stock

(3000 shares worth $41000 issued) $41,000

(4) Cash $116,000

Preferred stock (1500 *50) $75,000

Excess capital paid (116000-75000) $41,000