Finlay, Inc., issued 14,000 shares of $52 par value preferred stock at $68 per s

Question

Finlay, Inc., issued 14,000 shares of $52 par value preferred stock at $68 per share and 18,000 shares of no-par value common stock at $12 per share. The common stock has no stated value. All issuances were for cash. a. Prepare the journal entries to record the share issuances. b. Prepare the journal entry for the issuance of the common stock assuming that it had a stated value of $5 per share. c. Prepare the journal entry for the issuance of the common stock assuming that it had a par value of $1 per share.

Explanation / Answer

S.no . Particulars . Amount. (In Dollars) 1. Cash A/c. Dr. 9,52,000 To common stock A/c. 7,28,000 To security premium A/c . 2,24,000. ( Being stock issued at premium). 2. Cash A/c Dr 2,16,000 . To common stock A/c . 2,16,000. ( Being shares issued which has no face value). 3. Cash A/c. Dr. 2,16,000 . To common stock A/c. 90,000 . To security premium A/c. 1,26,000. ( Being security issued at premium having stated value) 4 . Cash A/c . Dr. 2,16,000 . To common stock A/c . 18,000. To security premium A/c. 1,96,000. ( Being shares issued at premium having par value)

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