Prepare journal entries to record the following four separate issuances of stock. A corporation issued 8,000 shares of $20 par value common stock for $192,000 cash. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $47,000. The stock has a $1 per share stated value. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $47,000. The stock has no stated value. A corporation issued 2,000 shares of $100 par value preferred stock for $247,000 cash.

Journal Entries

1. A corporation issued 8,000 shares of $20 par value common stock for $192,000 cash:

Debit Cash Account $192,000

Credit Common Stock $160,000

Credit Paid-in In Excess of Par $32,000

To record the issue of 8,000 shares of $20 par value.

2. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $47,000. The stock has a $1 per share stated value:

Debit Retained Earnings $4,000

Credit Common Stock $4,000

To record the issue of 4,000 shares of $1 stated value.

3. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $47,000. The stock has no stated value:

Debit Retained Earnings $47,000

Credit Common Stock $47,000

To record the issue of 4,000 shares of no stated value.

4. A corporation issued 2,000 shares of $100 par value preferred stock for $247,000 cash:

Debit Cash $247,000

Credit Preferred Stock $200,000

Credit Paid-in In Excess of Par $47,000

To record the issue of 2,000 shares of $100 par value.

Explanation:

Shares can be issued at par value, above, or below par value.  When they are issued at par value, the Cash Account or Retained Accounts or Asset Account is debited, while the Stock account is credited.  If they are above par value, the difference in at par and above is credited to the Paid-in In Excess of Par account or Additional Paid-in Capital account.  When they are issued below the par value, the difference between cash received and the stock account is debited to Paid-in In Excess of Par account.

The stated value of a share is like the par value.  Some shares have no stated value and are recorded at whichever value is prevailing at the time of the issue.

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total