To expand operations, a consulting company issued 1,900 shares of previously uni
ID: 2415249 • Letter: T
Question
To expand operations, a consulting company issued 1,900 shares of previously unissued common stock with a par value of $1. The price for the stock was $50 per share.
1-a.
Complete the table below, indicating the account, amount, and direction of the effect for the stock issuance. (Enter any decreases to account balances with a minus sign.)
Assets
=
Liabilities
+
Stockholders’ Equity
(a)
(b)
1-b.
Prepare the journal entry for the stock issuance. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Record the issuance of 1,900 shares with a $1 par value for a price of $50 per share.
2-a.
Complete the table below, indicating the account, amount, and direction of the effect for the stock issuance with a par value of $2. (Enter any decreases to account balances with a minus sign.)
Assets
=
Liabilities
+
Stockholders’ Equity
(a)
(b)
2-b.
Prepare the journal entry for the stock issuance, if the par value were $2 per share. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Record the issuance of 1,900 shares with a $2 par value for a price of $50 per share.
To expand operations, a consulting company issued 1,900 shares of previously unissued common stock with a par value of $1. The price for the stock was $50 per share.
Explanation / Answer
1 Assets = Liabilities + Stockholders’ Equity (a) Cash=$95000 + Common stock $1,900 + Paid in capital in excess $93,100 Total $95,000 1. b Account Title Dr Cr Cash (1900*50) $95,000 Common stock (1900*1) 1900 Paid in Capital in excess of par value (1900*49) 93100 2 Assets = Liabilities + Stockholders’ Equity (a) Cash=$95000 + Common stock $3,800 + Paid in capital in excess $91,200 Total $95,000 2. b Account Title Dr Cr Cash (1900*50) $95,000 Common stock (1900*2) 3800 Paid in Capital in excess of par value (1900*48) 91200
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