Question

qs 13 - 3 (algo) issuance of par and stated value common stock lo p1
prepare the journal entry to record jevonte companys issuance of 31,000 shares of its common stock assuming the shares have a:
a. $2 par value and sell for $18 cash per share.
b. $2 stated value and sell for $18 cash per share.
journal entry worksheet
< 1 2
record the issuance of 31,000 shares of common stock assuming the shares have a $2 par value and sell for $18 cash per share.
note: enter debits before credits.
transaction general journal debit credit

Explanation:

Step1: Calculate cash received

Cash = Number of shares × Issue - price per - share. Cash = 31000×18 = 558000.

Step2: Calculate par - value of shares issued

Par - value = Number of shares × Par value per - share. Par - value = 31000×2 = 62000.

Step3: Calculate additional paid - in capital

Additional paid - in capital = Cash received−Par - value of shares issued. Additional paid - in capital = 558000 - 62000=496000.

For part a:

Transaction	General Journal	Debit	Credit
	Common Stock (at par)		62000
	Additional Paid - in Capital, Common Stock		496000

Step4: For part b (when stated value is used instead of par value, the accounting treatment is similar to par - value case)

Cash = 31000×18 = 558000.
Stated - value = 31000×2 = 62000.
Additional paid - in capital = 558000 - 62000 = 496000.

Transaction	General Journal	Debit	Credit
	Common Stock (at stated value)		62000
	Additional Paid - in Capital, Common Stock		496000

Answer:

For part a:

Transaction	General Journal	Debit	Credit
	Common Stock (at par)		62000
	Additional Paid - in Capital, Common Stock		496000

For part b:

Transaction	General Journal	Debit	Credit
	Common Stock (at stated value)		62000
	Additional Paid - in Capital, Common Stock		496000