assume Ad issue 2000 shares of $ 60 par common stock for cash at $ 50. pass entry for issuance of these shares.
To pass the entry for the issuance of common stock, you will need to debit the appropriate accounts and credit the corresponding accounts. Here's how you can do it:
1. Determine the accounts involved:
- Common Stock (this is the account where you record the par value of the shares issued)
- Additional Paid-in Capital (this is the account where you record any excess received over the par value)
2. Calculate the total amount received:
The total amount received is calculated by multiplying the number of shares issued by the issue price per share. In this case, Ad issued 2000 shares at $50 per share, so the total amount received is 2000 * $50 = $100,000.
3. Pass the entry:
- Debit: Cash for $100,000 (since the company received cash)
- Debit: Common Stock for $120,000 (2000 shares * $60 par value per share)
- Credit: Additional Paid-in Capital for $20,000 ($120,000 par value - $100,000 cash received)
The entry would look as follows:
Cash $100,000
Common Stock $120,000
Additional Paid-in Capital $20,000
Please note that the par value of the stock and the amount received might vary in different scenarios, so make sure to adjust the entries accordingly if there are any differences.