Question

PUILPie CIUILE QUSLU11 00
Sunland, Inc. issued 10300 shares of stock at a stated value of $7 per share. The total issue of stock sold for 16$ per share. the journal entry to record thsi transaction would include a ?​

Answer 1

Answer:

The journal entry to record the issuance of new stocks is:

Dr Cash 164,800

    Cr Common stock 72,100

    Cr Additional paid in capital in excess of par value 92,700

When you issue new stocks, the common stock account increases by par value (= 10,300 stocks x $7). Any money obtained over par value must be recorded under the additional paid in capital account (= 10,300 x $9).