Question

"Prepare the issuer's journal entry for each of the following separate transactions.

On March 1, Atlantic Co. issues 44,500 shares of $3 par value common stock for $303,500 cash.
On April 1, OP Co. issues no-par value common stock for $74,000 cash.
On April 6, MPG issues 2,400 shares of $20 par value common stock for $43,000 of inventory, $155,000 of machinery, and acceptance of a $93,000 note payable."

Required:
a. Record the issuance of 44,500 shares of $3 par value common stock for $303,500 cash.
b. Record the issuance of no-par value common stock for $74,000 cash.

Answer 1

Dr cash $303,500

Cr common stock $133,500

Cr paid in capital in excess of par value $170,000

Second issue of shares:

Dr cash $74,000

Cr common stock $74,000

Step-by-step explanation:

The cash received from the issuance of 44,500 at $3 par value is $303,500 which is to debited to cash and credited to common stock for$133,500 ($3*44,500) while the balance of $170,000 ($303,500-$133,500) is credited to paid in capital in excess par value account.

On the issuance of no par value common stock for cash of $74,000,the cash account is debited as usual with $74,000 while the common stock account is credited with same amount.