Exercise11-4 Osage Corporation issued 2,000 shares of stock. Prepare the entry f

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Exercise11-4 Osage Corporation issued 2,000 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. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
(a) The stock had a par value of $5 per share and was issued for a total of $52,000. (b) The stock had a stated value of $5 per share and was issued for a total of $52,000. (c) The stock had no par or stated value and was issued for a total of $52,000. (d) The stock had a par value of $5 per share and was issued to attorneys for services during incorporation valued at $52,000. (e) The stock had a par value of $5 per share and was issued for land worth $52,000 Exercise 11-6 Hodge Corporation issued 100,000 shares of $20 par value, cumulative, 6% preferred stock on January 1, 2014, for $2,300,000. In December 2016, Hodge declared its first dividend of $500,000.
A)Prepare Hodge’s journal entry to record the issuance of the preferred stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
B) if the preferred stock is not cumulative, how much of the$ 500,000 would be paid to common stockholders?
C)If the preferred stock is not cumulative, how much of the $500,000 would be paid to common stockholders?
Exercise 11-6 Hodge Corporation issued 100,000 shares of $20 par value, cumulative, 6% preferred stock on January 1, 2014, for $2,300,000. In December 2016, Hodge declared its first dividend of $500,000.
A)Prepare Hodge’s journal entry to record the issuance of the preferred stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
B) if the preferred stock is not cumulative, how much of the$ 500,000 would be paid to common stockholders?
C)If the preferred stock is not cumulative, how much of the $500,000 would be paid to common stockholders?
"Exercise 11-4 Osage Corporation issued 2,000 shares of stock. Prepare the entry for the issuance under the following assumptions. (Credit account titles are automatically Indented when amo entry" for the account titles and enter O for the amounts.) (a) The stock had a par value of $5 per share and was issued for a total of $52,000 (b) The stock had a stated value of $5 per share and was issued for a total of $52,000. (e) The stock had no par or stated value and was issued for a total of $52,000. (d) The stock had a par value of $5 per share and was issued to attorneys for services during incorporation valued at $52,000 (e) The stock had a par value of $5 per share and was issued for land worth $52,000. The stock had a par value of s5 per share and assse torlstnd worth dri inron valed at 2,00. No. Account Tities and Explanation Debit Credit

Explanation / Answer

Exercise 11-4

When par value shares are issued exactly at par, cash is debited and common stock or preferred stock account is credited.

In case of issuance above par, cash account is debited for the total cash received by the company, common stock or preferred stock is credited for the par value multiplied by number shares issued and additional paid-in capital account is credited for the excess of cash received over the par value mulitplied by number of shares issued.

When par value shares are issued below par, cash is debited for the actual amount recieved, common stock or preferred stock is credited for the total par value and discount on capital is debited for the excess of total par value over cash recieved. The discount on capital is part of shareholders' equity and it appears as a deduction from other equity accounts on balance sheet.

1. Cash account is debited by $ 52000 and corresponding credit is given to common stock account $10000 ($5 * 2000 shares) and also credited to additional paid in capital is credited by $ 42000.

However if board of directors of the company assigns a value to shares orally, such value is called stated value and the journal entry will be similar to par value stock.

Therefore,

2. The same entry as above mentioned.

Issuance of shares having no par value is recorded by debiting cash and crediting common stock or prefered stock.

Therefore,

3. Cash account is debited by $ 52000 and common stock/preferred stock is credited by $ 52000.

4. In case the stock had a par value of $5 per share and was issued to attorneys for services during incorporation valued at $52,000, the journal entry will be:

Attorney Fees will be debited by $ 52000 and common stock will be credited by $ 10000 and additional paid in capital will be credited by $ 42000.

5. If in case the stock had a par value of $5 per share and was issued for land worth $52,000, then the entry will be:

Land account will be debited by $ 52000 and common stock will be credited by $ 10000 and additional paid in capital will be credited by $ 42000.

Exercise 11-6

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