rodriguez corporation issues 14,000 shares of its common stock for $49,500 cash on february 20. prepare…

rodriguez corporation issues 14,000 shares of its common stock for $49,500 cash on february 20. prepare journal entries to record this event under each of the following separate situations.\n1. the stock has a $2 par value.\n2. the stock has neither par nor stated value.\n3. the stock has a $1 stated value.\nview transaction list\njournal entry worksheet\nrecord the issue of 14,000 shares of $2 par value common stock for $49,500 cash.\nnote: enter debits before credits.\ntransaction general journal debit credit

rodriguez corporation issues 14,000 shares of its common stock for $49,500 cash on february 20. prepare journal entries to record this event under each of the following separate situations.\n1. the stock has a $2 par value.\n2. the stock has neither par nor stated value.\n3. the stock has a $1 stated value.\nview transaction list\njournal entry worksheet\nrecord the issue of 14,000 shares of $2 par value common stock for $49,500 cash.\nnote: enter debits before credits.\ntransaction general journal debit credit

Answer

Explanation:

Step1: Calculate par - value amount for situation 1

Par - value amount = Number of shares × Par value per share = 14000×2 = $28000

Step2: Calculate additional paid - in capital for situation 1

Additional paid - in capital = Cash received - Par - value amount = 49500 - 28000 = $21500

Step3: Record journal entry for situation 1

Debit Cash for $49500, Credit Common Stock for $28000 and Credit Additional Paid - in Capital for $21500

Step4: Record journal entry for situation 2

When there is no par or stated value, debit Cash for $49500 and Credit Common Stock for $49500

Step5: Calculate stated - value amount for situation 3

Stated - value amount = Number of shares × Stated value per share = 14000×1 = $14000

Step6: Calculate additional paid - in capital for situation 3

Additional paid - in capital = Cash received - Stated - value amount = 49500 - 14000 = $35500

Step7: Record journal entry for situation 3

Debit Cash for $49500, Credit Common Stock for $14000 and Credit Additional Paid - in Capital for $35500

Answer:

Transaction General Journal Debit Credit
1 Cash $49500
Common Stock $28000
Additional Paid - in Capital $21500
2 Cash $49500
Common Stock $49500
3 Cash $49500
Common Stock $14000
Additional Paid - in Capital $35500