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Prepare the journal entry to record Zende Company’s issuance of 82,000 shares of $6 par value common stock assuming the shares sell for: $6 cash per share. $7 cash per share.

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Zviko

Answer:

Journal entry to record $6 cash per share issue

Cash $492,000 (debit)

Common Stock $492,000 (credit)

Journal entry to record $7 cash per share issue

Cash $574,000 (debit)

Common Stock $492,000 (credit)

Share Premium $82,000 (credit)

Explanation:

Since the Common Stocks have a par value of $6, this means that any price paid in excess of the par value will be in share premium reserve.

For the $7 issue the excess $1 per share is the share premium reserve.

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