Question

When companies offer new equity security issues, they publicize the offerings in the financial press and on Internet sites. Assume the following were among the equity offerings reported in December 2021:

	New Securities Issues
	Equity
	American Materials Transfer Corporation (AMTC)—7.5 million common shares, $0.001 par, priced at $13.546 each through underwriters led by Second Tennessee Bank N.A. and Morgan, Dunavant & Co., according to a syndicate official.
	Proactive Solutions Inc. (PSI)—Offering of 9 million common shares, $0.01 par, was priced at $15.20 a share via lead manager Stanley Brothers, Inc., according to a syndicate official.

Required:
Prepare the appropriate journal entries to record the sale of both issues to underwriters. Ignore share issue costs. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Answer 1

Books of AMTC
Date	Account Titles & Explanation	Debit	Credit
December 2021	Cash ( 7,500,000 x 13.546 )	101,595,000
	Common Stock ( 7,500,000 x 0.001 )		7,500
	Paid-in Capital in Excess of Par value-Common Stock		101,587,500
	( 7,500,000 x 13.545 )
	(To record the issue of 7.5 million common shares $0.001 par , at $13.546 per share )
Books of PSI
Date	Account Titles & Explanation	Debit	Credit
December 2021	Cash ( 9,000,000 x 15.20 )	136,800,000
	Common Stock ( 9,000,000 x 0.01 )		90,000
	Paid-in Capital in Excess of Par value-Common Stock		136,710,000
	( 9,000,000 x 15.19 )
	(To record the issue of 9 million common shares $0.01 par , at $15.20 per share )