tb problem qu. 13 - 166 (algo) recording common stock issuances\nrecord entries for each of the following…

tb problem qu. 13 - 166 (algo) recording common stock issuances\nrecord entries for each of the following separate issuances of stock.\n1. issued 270 shares of $100 par - value common stock for $27,540 cash.\n2. exchanged 770 shares of no - par common stock for $12,200 in legal services incurred in the organization of the company.\nview transaction list\njournal entry worksheet\nnote: enter debits before credits.\ntransaction general journal debit credit

tb problem qu. 13 - 166 (algo) recording common stock issuances\nrecord entries for each of the following separate issuances of stock.\n1. issued 270 shares of $100 par - value common stock for $27,540 cash.\n2. exchanged 770 shares of no - par common stock for $12,200 in legal services incurred in the organization of the company.\nview transaction list\njournal entry worksheet\nnote: enter debits before credits.\ntransaction general journal debit credit

Answer

Explanation:

Step1: Analyze the first - stock issuance

For the issuance of 270 shares of $100 par - value common stock for $27,540 cash. The cash received is debited, and the common stock is credited at par value with any excess credited to paid - in capital in excess of par. Debit: Cash $27,540 Credit: Common Stock ($100×270) = $27,000 Credit: Paid - in Capital in Excess of Par, Common Stock ($27,540 - $27,000) = $540

Step2: Analyze the second - stock issuance

For the exchange of 770 shares of no - par common stock for $12,200 in legal services. The legal services are an expense (Organization Expense) and the common stock is credited. Debit: Organization Expense $12,200 Credit: Common Stock $12,200

Answer:

Transaction General Journal Debit Credit
1 Cash $27,540
1 Common Stock $27,000
1 Paid - in Capital in Excess of Par, Common Stock $540
2 Organization Expense $12,200
2 Common Stock $12,200