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Prepare the journal entry to record Jevonte Company's issuance of 36,000 shares of its common stock assuming the shares have a:

a. $2 par value and sell for $18 cash per share.

b. $2 stated value and sell for $18 cash per share.

Respuesta :

Answer:

a

Dr Cash ($18 x 36,000 shares)                               $ 648,000

Cr Common Stock  ($2 x 36,000 shares)               $72,000

Cr Share premium ($16,000 x 36,000 shares)       $576,000

b

Dr Cash ($18 x 36,000 shares)                                      $648,000

Cr Common Stock  ($2 x 36,000 shares)                     $ 72,000

Cr Share premium  ($16 x 36,000 shares)                     $576,000

Explanation:

On both situations the journal entries remain the same.

The cash amount received of $648,000 shall be debited while the nominal values of the shares of $2 each shall be credited to the share capital account and the balance of $16 each shall be credited to share premium.

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