Question

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

Jan. 10		Issued 25,600 shares for cash at $4 per share.
July 1		Issued 53,000 shares for cash at $8 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 $2 per share.

Answer 1

(a)Journalize the transactions, assuming that the common stock has a par value of $4 per share.

January 10

Dr     Cash (25600 x $4)                   $102400

Cr      Common Stock $102400

July 1

Dr     Cash (53000 x $8)                            $4,24,000

Cr      Common Stock (53000x$4) $2,12,000

Cr      Additional Paid-in Capital $2,12,000

(b)Journalize the transactions, assuming that the common stock is no-par with a stated value of $2 per share.

January 10

Dr     Cash (25600 x $4)                                      $1,02,400

Cr      Common Stock (25600x$2) $51,200

Cr      Paid-in Capital in Excess of Stated Value - CS $51,200

July 1

Dr     Cash (53000 x $8)                                      $4,24,000

Cr      Common Stock (53000x$2) $1,06,000

Cr      Paid-in Capital in Excess of Stated Value - CS $3,18,000