Question

During its first year of operations, Larkspur, Inc. had the following transactions pertaining to its common stock. Jan. 10 Issued 75,000 shares for cash at $6 per share. July 1 Issued 41,000 shares for cash at $9 per share. A.) Journalize the transactions, assuming that the common stock has a par value of $6 per share. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit B.) Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Date Date

Answer 1

The journal entry for the first year of operations for Larkspur, Inc., given the number of shares sold and the par value, is:
Date                 Account title                                        Debit            Credit

Jan.10              Cash                                                  $ 450, 000

                       Common stock                                                     $ 450, 000

July 1                 Cash                                                 $ 369, 000

                        Common stock                                                    $ 246, 000

                       Additional paid - in capital                                  $ 123, 000

How to record the issuance of stock?

When stock is issued at par, the value that goes to the cash account is found by the formula:

= Par value x Number of shares

= 6 x 75, 000

= $ 450, 000

This amount will be debited to cash as an asset and credited to common stock as equity.

When stock is issued at an amount higher than par, then the amount to cash is:

= Number of shares x Issue price

= 41, 000 x 9

= $ 369, 000

The amount to be credited to common stock :
= Par value x Number of shares

= 6 x 41, 000

= $ 246, 000

The amount to be credited to Additional paid - in capital :

= Cash - common stock

= 369, 000 - 246, 000

= $ 123, 000

Find out more on recording stock issued at https://brainly.com/question/25562729

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