Question

Zeus Coporation issued 5,000 shares of stock.

prepare the entry for the insurance under the following assumptions.

a) The stock had a par value of $5 per share and was issued for a for a total of $65,000

b) The stock had a stated value of $5 per share and was issued for total of $65,000

c) The stock had a par value of $5 per share and was issued to attorneys for services during in-corporation valued at $65,000

d) The stock had a par value of $5 per share and was issued for land worth $65,000

Date Account Tittles and Explanation Debit Credit

Answer 1

Solution

Date	Accounts title	Debit	Credit
a	Cash	$          65,000.00
	Common stock		$ 25,000.00
	paid in Capital in Excess of Par value - Common stock		$ 40,000.00
	(To record issue of common stock)
b	Cash	$          65,000.00
	Common Stock		$ 25,000.00
	paid in Capital in Excess of Stated value - Common Stock		$ 40,000.00
	(Common Stock issued for cash)
c	Legal expenses	$          65,000.00
	Common stock		$ 25,000.00
	paid in Capital in Excess of Par value - Common stock		$ 40,000.00
	(To record issue of common stock)
d	Land	$          65,000.00
	Common stock		$ 25,000.00
	paid in Capital in Excess of Par value - Common stock		$ 40,000.00
	(To record issue of common stock in exchange of land)

When Par value is not given then stated value is treated as Par value.