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Rodriguez Corporation issues 19,000 shares of its common stock for $152,000 cash on February 20. Prepare journal entries to record this event under each of the following separate situations. The stock has a $2 par value. The stock has neither par nor stated value. The stock has a $5 stated value.

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Manetho

Answer:

Solved

Explanation:

Part 1:  when stock has a $2 par value

Cash Debit 152000

Common Stock (19000*2) Cr. $38000

Paid-in Capital in Excess of Par Value (152000 - 38000) Cr.$ 114000

Part 2:  when stock has neither par nor stated value

Cash Dr.152000

Common Stock Cr. 152000

Part 3:  when stock has a $5 stated value

Cash Debit 152000

Common Stock (19000*5) Cr.$95000

Paid-in Capital in Excess of Stated Value (152000 - 95000) Cr.$57000

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                                                                        Debt               Credit

Cash 19,000 x 152,000                           $ 2,888,000,000

Common Stock (19,000 x $ 2)                                             $ 38,000

Paid Up Capital Exceeds the Value Set (19,000 x $ 5)      $ 95,000

Further Explanation

Shares are securities or books which are a sign of ownership or equity participation in a company.

Stocks usually take the form of a piece of paper as proof. Shares can be obtained from the company concerned directly or from previous parties through the stock exchange (stock market).

Book Value of Shares

The book value of shares is the value of shares according to the company's books. The book value of the shares is obtained from the value of the remaining assets after deducting the company's liability if the shares are distributed. The book value shows the guarantee or how big the function of shares owned by investors. Some values ​​related to book values ​​include:

  • Nominal value is the value determined by the company for its shares.
  • Agio share is the difference in price from an investor's payment to the company minus the nominal price of the stock.
  • Capital value is the total amount paid by shareholders to the company, in the form of nominal value + share capital.
  • Retained earnings are profits not distributed to shareholders which are used for investment as a source of internal company funds.

Cash Flow for Shareholders:

If you buy shares, you can get cash in two ways, namely:

  • The company pays dividends
  • We sell shares (to other investors in the capital market or to issuers/companies that sell their shares to the public)
  • Like bonds, stock prices are the present value of expected cash flows.

Learn More

Common Stock https://brainly.com/question/13513598

Values of Shares https://brainly.com/question/13024270

Detail

Class: College

Subject: Business

Keyword: Stock, Journal, Debt-Credit

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