Answer: Please see explanation column for answers.
Explanation:
a)Journal to record issuance of the shares at a stated value of $1
Date Account and explanation Debit Credit
june 6 Cash $24,000
Common stock at $1 stated value $4000
Paid in capital in excess of stated value $20,000
Calculation:
Cash = issued shares x price per share
4000 x $6 = $24,000
paid in capital in excess pf par stated value = $6- $1 x 4000 = $20,000
b)Journal to record issuance of the stock in acquiring the land.
Date Account and explanation Debit Credit
Land $85,000
Common stock at $10 (5000 x 10) $50,000
Paid in capital in excess of par value $35,000
Calculation:
cash to purchase land = issued shares x price per share
85,000= 5000 x $
$ = 85,000 /5000 = $17
Paid in capital in excess of par value $17-10 x 5000 = $35,000
Based on the information given the appropriate journal entry to record Noonan Inc. and Lei transactions are:
a. Noonan Inc Journal entry
Debit Cash $24,000
(4000 x $6)
Credit Common stock $4,000
(4,000×$1)
Credit Paid in capital in excess of stated value - common stock $20,000
[($6-$1)×4,000]
(To record issuance of shares)
b. Lei Journal entry
Debit Land $75,000
($15×5,000)
Credit Common stock $50,000
($10×5,000)
Credit paid in capital in excess of par-common stock $25,000
[($15-$10)×5,000]
(To record issuance of stock)
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