Questions: QS 13-3 (Algo) Issuance of par and stated value common stock LO P1 Prepare the journal entry to record Jevonte Company's issuance of 36,000 shares of its common stock assuming the shares have a: a. 4 par value and sell for 14 cash per share. b. 4 stated value and sell for 14 cash per share. View transaction list Journal entry worksheet 2 Record the issuance of 36,000 shares of common stock assuming the shares have a 4 par value and sell for 14 cash per share. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Cash 504,000 144,000 Paid-in capital in excess of par value, common stock 360,000

Solution Steps

The cash received from issuing the shares is calculated by multiplying the number of shares issued by the price per share. In this case, 36,000 shares * $14/share = $504,000.

The total par value of the shares issued is calculated by multiplying the number of shares issued by the par value per share. 36,000 shares * $4/share = $144,000.

This is the difference between the cash received and the total par value. $504,000 - $144,000 = $360,000.

The journal entry includes a debit to Cash for the total amount received, a credit to Common Stock for the total par value, and a credit to Paid-in Capital in Excess of Par Value, Common Stock for the excess amount received.

The stated value is treated similarly to par value when recording the journal entry. The journal entry would include a debit to Cash for $504,000, a credit to Common Stock for $144,000 (36,000 shares * $4 stated value), and a credit to Paid-in Capital in Excess of Stated Value, Common Stock for $360,000.

Final Answer