Question

Zeus Corporation issued 5,000 shares of stock. Prepare the entry for the issuance under the following assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The stock had a par value of $5 per share and was issued for a total of $65,000. (b) The stock had a stated value of $5 per share and was issued for a total of $65,000. (c) The stock had a par value of $5 per share and was issued to attorneys for services during in-corporation valued at $65,000. (d) The stock had a par value of $5 per share and was issued for land worth $65,000.

Answer 1

Answer:

Cash   65,000 debit

Common Stock           25,000 credit

 Additional paid-in CS 40,000 credit

Fees Expense   65,000 debit

Common Stock           25,000 credit

 Additional paid-in CS 40,000 credit

Land                  65,000 debit

Common Stock           25,000 credit

 Additional paid-in CS 40,000 credit

Explanation:

In all cases we compare the face value of the stock agint the market value exchanged for the shares.

a) and b) 5,000 shares x $5 par value or state value = 25,000

as we receive 65,000 there are 40,000 aditional paid-in CS

par value and stated value refer to the same the value printed in the shares documents

c) we have to recognize the fees expense or the account payable if these were already accrued

d) we debit the land received in exchange for the land

Answer 2

The preparation of the journal entry for the issuance of 5,000 shares by Zeus Corporation under the different assumptions are as follows:

Journal Entry:

a) Debit Cash $65,000

Credit Common Stock $25,000

Credit Additional Paid-in Capital $40,000

• To record the issuance of 5,000 shares at $5 par value.

b) Debit Cash $65,000

Credit Common Stock $25,000

Credit Additional Paid-in Capital $40,000

• To record the issuance of 5,000 shares at $5 stated value.

c) Debit Attorney Fees $65,000

Credit Common Stock $25,000

Credit Additional Paid-in Capital $40,000

• To record the issuance of 5,000 shares at $5 par value.

d) Debit Land $65,000

Credit Common Stock $25,000

Credit Additional Paid-in Capital $40,000

• To record the issuance of 5,000 shares at $5 par value.

What is stock issuance record?

Stock issuance record is the entry that is made in the general journal of Zeus Corporation when it issues shares.  Shares can be issued for cash, land, to pay expenses, etc.

Data Analysis:

a) Cash $65,000 Common Stock $25,000 Additional Paid-in Capital $40,000

b) Cash $65,000 Common Stock $25,000 Additional Paid-in Capital $40,000

c) Attorney Fees $65,000 Common Stock $25,000 Additional Paid-in Capital $40,000

d) Land $65,000 Common Stock $25,000 Additional Paid-in Capital $40,000

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