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26 October, 00:49

Prepare the journal entry to record Jevonte Company's issuance of 36,000 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.

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  1. 26 October, 02:19
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    a

    Dr Cash ($18 x 36,000 shares) $ 648,000

    Cr Common Stock ($2 x 36,000 shares) $72,000

    Cr Share premium ($16,000 x 36,000 shares) $576,000

    b

    Dr Cash ($18 x 36,000 shares) $648,000

    Cr Common Stock ($2 x 36,000 shares) $ 72,000

    Cr Share premium ($16 x 36,000 shares) $576,000

    Explanation:

    On both situations the journal entries remain the same.

    The cash amount received of $648,000 shall be debited while the nominal values of the shares of $2 each shall be credited to the share capital account and the balance of $16 each shall be credited to share premium.
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