Question

  

During its first year of operations, Pronghorn Corp had these transactions pertaining to its common stock.

Jan. 10Issued 26,200 shares for cash at $4 per share.July 1Issued 56,000 shares for cash at $7 per share.
(a)Journalize the transactions, assuming that the common stock has a par value of $4 per share.(b)Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share

Answer 1

· Requirement [a]

Date	Accounts title	Debit	Credit
10-Jan	Cash (26200 shares x $ 4)	$104,800
	Common Stock - par		$104,800
	(to record issuance of common stock)
01-Jul	Cash (56000 shares x $ 7)	$392,000
	Common Stock - par (56000 shares x $ 4 par)		$224,000
	Paid in Capital in excess of Par - Common Stock		$168,000
	(to record issuance of common stock)

· Requirement [b]

Date	Accounts title	Debit	Credit
10-Jan	Cash (26200 shares x $ 4)	$104,800
	Common Stock - no par (26200 shares x $ 1)		$26,200
	Paid in Capital in excess of stated value - Common Stock		$78,600
	(to record issuance of common stock)
01-Jul	Cash (56000 shares x $ 7)	$392,000
	Common Stock - no par (56000 shares x $ 1)		$56,000
	Paid in Capital in excess of stated value - Common Stock		$336,000
	(to record issuance of common stock)