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16 February, 04:12

Western Wear Clothing issues 2,700 shares of its $0.01 par value common stock to provide funds for further expansion. Assuming the issue price is $11 per share, record the issuance of common stock.?

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  1. 16 February, 04:44
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    The Journal entry is as follows:

    Cash A/c Dr. $29,700

    To common stock $27

    To Additional Paid in Capital in excess of par - Common Stock $29,673

    Workings:

    Shares issued = 2,700

    Par value common stock to provide funds for further expansion = $0.01

    Issue price = $11 per share

    cash = Shares issued * Issue price per share

    = 2,700 * $11

    = $29,700

    Common Stock = Shares issued * Par value common stock

    = 2,700 * $0.01

    = $27

    Additional Paid in Capital in excess of par - Common Stock:

    = cash - Common Stock

    = $29,700 - $27

    = $29,673
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