To expand operations, Aragon Consulting issued 1,700 shares of previously unissued common stock with a par...

To expand operations, Aragon Consulting issued 1,700 shares of previously unissued common stock with a par value of $1. The price for the stock was $50 per share.

Required:

1-a. Complete the table below, indicating the account, amount, and direction of the effect for the stock issuance. (PLEASE PUT INTO ASSET = LI + STOCK E (format)
1-b. Prepare the journal entry for the stock issuance. (PLEASE PUT INTO JOURNAL FORMAT)
2-a. Complete the table below, indicating the account, amount, and direction of the effect for the stock issuance with a par value of $2. (PLEASE PUT INTO ASSET = LI + STOCK E (format)
2-b. Prepare the journal entry for the stock issuance, if the par value were $2 per share. (PLEASE PUT INTO JOURNAL FORMAT)

Solutions

Expert Solution

Part 1 - a, b

Accounting equation
Transactions	Assets ($)		=	Liabilities ($)	Stockholders equity ($)
Issuance of shares:
Cash (1700 shares X $50)	85000			0	0
Common stock (1700 shares X $1)	0			0	1700
Additional paid-in capital - common stock (1700 shares X $49)	0			0	83300
Total	85000			0	85000

Jouranl entry	Dr.($)	Cr.($)
Cash	85000
To Common stock		1700
To Additional paid-in capital - common stock		83300
(being issuance of shares)

Part 2 - a, b

Accounting equation
Transactions	Assets ($)		=	Liabilities ($)	Stockholders equity ($)
Issuance of shares:
Cash (1700 shares X $50)	85000			0	0
Common stock (1700 shares X $2)	0			0	3400
Additional paid-in capital - common stock (1700 shares X $48)	0			0	81600
Total	85000			0	85000

Jouranl entry	Dr.($)	Cr.($)
Cash	85000
To Common stock		81600
To Additional paid-in capital - common stock		3400
(being issuance of shares)

ekkarill92 answered 1 year ago

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