First journal entry is
DR Cash 375000*
CR Ordinary Share Capital 375000*
*(75000 x 5)
Second Journal Entry is
DR Cash 450000*
CR Ordinary Share Capital 375000**
CR Additional Paid-in Capital 75000***
* (75000 x 6)
** ( 75000 x 5 )
*** (75000 x 1) or (450000 - 375000)
NOTE: If you are journalizing issuance of common stocks, one sure thing you should do is to credit Ordinary Share Capital. OSC is always at par. So the shares issued are always multiplied by the par value of the common stock.
Just need some help with accounting. Thanks guys
The second part of the question says: Prepare the journal entry to record Zende Company’s issuance of 75,000 shares of $5 par value common stock assuming the shares sell for $6 cash per share.
Would I journal this similar to the first question?
