Question

Prepare the journal entry to record Jevonte Company’s issuance of 42,000 shares of its common stock assuming the shares have a: $4 par value and sell for $20 cash per share. $4 stated value and sell for $20 cash per share.

Answer 1

The journal entry to record Jevonte Company's issuance of 42,000 shares of its common stock with a $4 par value and selling for $20 cash per share is: Debit Cash for $840,000 and credit Common Stock for $168,000.

Step-by-step explanation:

To record Jevonte Company's issuance of 42,000 shares of its common stock with a $4 par value and selling for $20 cash per share, we need to debit the Cash account for the total amount received and credit the Common Stock account for the par value of the shares issued. Here is the journal entry:

Debit: Cash - $840,000 ($20 x 42,000)

Credit: Common Stock - $168,000 ($4 x 42,000)

Answer 2

Find the detailed answer in the explanation section

Step-by-step explanation:

For A. $4 par value and sell for $20 cash per share

Par Value is $4 x 42,000 shares

=$168,000

Cash sales is $20 x 42,000 shares

=$840,000

Paid-in captial in excess of par value, common stock = $840,000 - $168,000

=$672,000

Journal entry:

Dr Cash. $840,000

Cr common stock(par value) $168,000 Cr Paid-in captial in excess of par value(common stock). $672,000

For B. $4 stated value and sell for $20 cash per share.

Stated Value is $4 x 42,000 shares

=$168,000

Cash sales is $20 x 42,000 shares

=$840,000

Paid-in captial in excess of stated value, common stock = $840,000 - $168,000

=$672,000

Journal entry:

Dr Cash. $840,000 Cr common stock(stated value) $168,000

Cr Paid-in captial in excess of stated value(common stock). $672,000