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26 January, 15:51

hen a company issues 37,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would include:

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  1. 26 January, 17:56
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    Debit Cash Account $370,000

    Credit Common Stock Account $37,000

    Credit Share Premium Account $333,000

    Explanation:

    Given a par value of $1, and an issue price of $10, the shares were issued at a premium of (10 - 1 = ) $9.

    Therefore, the journal entry are as follows.

    Debit Cash Account (37,000 * $10) = $370,000

    Credit Common Stock Account (37,000 * $1) = $37,000

    Credit Share Premium Account (37,000 * $9) = $333,000.
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