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Answer:
The journal entries will as under the explanation below.
Explanation:
(a) The stock had a par value of $5 per share and was issued for a total of $52,000.
Account Name Dr ($) Cr ($)
Cash 52,000
Common stock (2,000 * 5) 10,000
Paid in capital in excess of per value 42,000
(To record common stock issued in excess of par value.)
(b) The stock had a stated value of $5 per share and was issued for a total of $52,000.
Account Name Dr ($) Cr ($)
Cash 52,000
Common stock (2,000 * 5) 10,000
Paid in capital in excess of stated value 42,000
(To record common stock issued in excess of stated value.)
Note: The stated value is used for internal accounting purpose when there is no par value for the stock.
(c) The stock had no par or stated value and was issued for a total of $52,000.
Account Name Dr ($) Cr ($)
Cash 52,000
Common stock 52,000
(To record common stock issued that had no par or stated value.)
Note: When stock had no par or stated value, the total proceeds from the issue becomes the legal capital.
(d) The stock had a par value of $5 per share and was issued to attorneys for services during incorporation valued at $52,000.
Account Name Dr ($) Cr ($)
Attorney service expenses 52,000
Common stock (2,000 * 5) 10,000
Paid in capital in excess of per value 42,000
(To record common stock issued to attorneys for services at a premium.)
(e) The stock had a par value of $5 per share and was issued for land worth $52,000.
Account Name Dr ($) Cr ($)
Land (Fair value) 52,000
Common stock (2,000 * 5) 10,000
Paid in capital in excess of per value 42,000
(To record common stock issued for land at a premium.)
Based on the information the appropriate journal entries for issuance under the given transactions are:
Osage Corporation Journal entries
a. Debit Cash $52,000
Credit Common Stock $10,000
(2,000 x $5 )
Credit Paid in capital in excess of par value -Common Stock $42,000
($52,000-$10,000)
b. Debit Cash $52,000
Credit Common Stock $10,000
(2,000 x $5 )
Credit Paid in capital in excess of par value -Common Stock $42,000
($52,000-$10,000)
c. Debit Cash $52,000
Credit Common Stock $52,000
d. Debit Incorporation Expense $52,000
Credit Common Stock $10,000
(2,000 x 5 )
Credit Paid in capital in excess of par value -Common Stock $42,000
($52,000-$10,000)
e. Debit Land $52,000
Credit Common Stock $10,000
(2,000 x 5 )
Credit Paid in capital in excess of par value -Common Stock $42,000
($52,000-$10,000)
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