Question

Rodriguez Corporation issues 10,000 shares of its common stock for $211,600 cash on February 20. Prepare journal entries to record this event under each of the following separate situations.
1. The stock has a $18 par value.
2. The stock has neither par nor stated value.
3. The stock has a $9 stated value.
Record the issue of 10,000 shares of $8 par value common stock for $122,200 cash.

Answer 1

Answer: Please find answers in the explanation column

Explanation:

1.Journal To record issue of common stock at $18 par value

Date Accounts & explanation Debit                    Credit

Feb 20 Cash                               $211,600  

    Common stock at $18 par value   (10000 X 18)      $180,000

    Paid in capital in excess of par value-common stock    $31,600

( $211,600 -  $180,000 )  

2. Journal entry To record issue of common stock at neither par nor stated value.

Date Accounts & explanation Debit         Credit

Feb 20 Cash                                $211, 600  

    Common stock                                                    $211, 600  

 

3. Journal To record issue of common stock at $9 stated  value

Date Accounts & explanation Debit                   Credit

Feb 20 Cash                                 $211, 600

    Common stock (10,000 X 9)                                    $90,000

Paid in capital in excess of stated value-common stock       $121,600

( $211,600 -  $90,000 )

4 . Journal To record issue of common stock at $8 par  value

Date Accounts & explanation Debit                   Credit

Feb 20 Cash                                 $211, 600

    Common stock (10,000 X 8)                                    $80,000

Paid in capital in excess of par value-common stock           $131,600

( $211,600 -  $80,000 )