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Prepare the issuer's journal entry for each of the following separate transactions.

a. On March 1, Atlantic Co. issues 52,500 shares of $4 par value common stock for $327,500 cash.
b. On April 1, OP Co. issues no-par value common stock for $90,000 cash.
c. On April 6, MPG issues 4,000 shares of $20 par value common stock for $59,000 of inventory, $185,000 of machinery, and acceptance of a $95,000 note payable.

Sagot :

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Answer:

A. Dr Cash $327,500

Cr Common Stock $210,000

Cr Capital Paid In $117,500

B. Dr Cash $90,000

Cr Common Stock $90,000

C. Dr Inventory $59,000

Dr Machinery $185,000

Cr Note Payable $95,000

Cr Common Stock $80,000

Cr Capital Paid In $69,000

Explanation:

Preparation of the issuer's journal entry

A. Dr Cash $327,500

Cr Common Stock $210,000

(52,500 shares* $4 par value )

Cr Capital Paid In $117,500

($327,500-$210,000)

B. Dr Cash $90,000

Cr Common Stock $90,000

C. Dr Inventory $59,000

Dr Machinery $185,000

Cr Note Payable $95,000

Cr Common Stock (4000 * $20) $80,000

Cr Capital Paid In $69,000

($59,000+$185,000-$95,000-$80,000)

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