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Prepare the issuer’s journal entry for each of the following separate transactions.

a. On March 1, Atlantic Co. issues 42,500 shares of $4 par value common stock for $297,500 cash.
b. On April 1, OP Co. issues no-par value common stock for $70,000 cash.
c. On April 6, MPG issues 2,000 shares of $25 par value common stock for $45,000 of inventory, $145,000 of machinery, and acceptance of a $94,000 note payable.

Respuesta :

Answer:

The Journal entries are as follows:

(i) On March 1,

Cash A/c              Dr. $297,500

To common stock (42,500 × $4)               $170,000                      

To paid in capital in excess of par value   $127,500

(To record the issuance of common stock)

(ii) On April 1,

Cash A/c              Dr. $70,000

To common stock                   $70,000  

(To issue no-par value common stock)

(iii) On April 6,

Inventory A/c     Dr. $45,000

Machinery A/c    Dr. $145,000

To common stock (2,000 × $25)               $50,000                      

To paid in capital in excess of par value   $46,000

To Note payable                                          $94,000

(To record the issuance of common stock)

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