On April 1, 10,000 shares of $5 par common stock were issued at $22, and on April 7, 5,000 shares of $50 par preferred stock were issued at $104. What are the entries for April 1 and 7?

Question

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- The April 1 entry correctly reflects the issuance of 10,000 shares of common stock at $22 per share. The common stock account is credited for the par value of the shares issued ($5 x 10,000 = $50,000), and the remaining amount received over par ($22 - $5 = $17 x 10,000 = $170,000) is credited to the account Paid-In Capital in Excess of Par-Common Stock.
- The April 7 entry correctly reflects the issuance of 5,000 shares of preferred stock at $104 per share. The preferred stock account is credited for the par value of the shares issued ($50 x 5,000 = $250,000), and the remaining amount received over par ($104 - $50 = $54 x 5,000 = $270,000) is credited to the account Paid-In Capital in Excess of Par-Preferred Stock. The total cash received on this date is $520,000.

On April 1, 10,000 Shares of $5 Par Common Stock