Answered

Sarasota Corporation issued 1,150 shares of stock. Prepare the entry for the issuance under the following assumptions:

(a) The stock had a par value of [tex]$7.50 per share and was issued for a total of $[/tex]45,000.

(b) The stock had a stated value of [tex]$7.50 per share and was issued for a total of $[/tex]45,000.

(c) The stock had no par or stated value and was issued for a total of [tex]$45,000.

(d) The stock had a par value of $[/tex]7.50 per share and was issued to attorneys for services during incorporation valued at [tex]$45,000.

(e) The stock had a par value of $[/tex]7.50 per share and was issued for land worth $45,000.

(Note: List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)



Answer :

GinnyAnswer
Let's create the journal entries for Sarasota Corporation's issuance of 1,150 shares of stock under each of the given assumptions. Remember to list all debit entries before credit entries, and credit account titles should be indented.


### (a) The stock had a par value of [tex]$7.50 per share and was issued for a total of $[/tex]45,000.

Explanation:
- Par Value of stock = [tex]$7.50 per share - Total Shares Issued = 1,150 shares - Total Value Issued = $[/tex]45,000

Calculations:
- Common Stock at Par Value = [tex]$7.50 * 1,150 = $[/tex]8,625
- Additional Paid-in Capital = Total Value Issued - Common Stock at Par Value = [tex]$45,000 - $[/tex]8,625 = [tex]$36,375 Journal Entry: ``` Debit: Cash $[/tex]45,000
Credit: Common Stock [tex]$8,625 Credit: Paid-in Capital in Excess of Par $[/tex]36,375
```

### (b) The stock had a stated value of [tex]$7.50 per share and was issued for a total of $[/tex]45,000.

Explanation:
- Stated Value of stock = [tex]$7.50 per share - Total Shares Issued = 1,150 shares - Total Value Issued = $[/tex]45,000

Calculations:
- Common Stock at Stated Value = [tex]$7.50 * 1,150 = $[/tex]8,625
- Additional Paid-in Capital = Total Value Issued - Common Stock at Stated Value = [tex]$45,000 - $[/tex]8,625 = [tex]$36,375 Journal Entry: ``` Debit: Cash $[/tex]45,000
Credit: Common Stock [tex]$8,625 Credit: Paid-in Capital in Excess of Stated Value $[/tex]36,375
```

### (c) The stock had no par or stated value and was issued for a total of [tex]$45,000. Explanation: - No Par or Stated Value for the stock - Total Shares Issued = 1,150 shares - Total Value Issued = $[/tex]45,000

Calculations:
- Total Value allocated to Common Stock = [tex]$45,000 Journal Entry: ``` Debit: Cash $[/tex]45,000
Credit: Common Stock [tex]$45,000 ``` ### (d) The stock had a par value of $[/tex]7.50 per share and was issued to attorneys for services during incorporation valued at [tex]$45,000. Explanation: - Par Value of stock = $[/tex]7.50 per share
- Total Shares Issued = 1,150 shares
- Value of Services = [tex]$45,000 Calculations: - Common Stock at Par Value = $[/tex]7.50 * 1,150 = [tex]$8,625 - Additional Paid-in Capital = Value of Services - Common Stock at Par Value = $[/tex]45,000 - [tex]$8,625 = $[/tex]36,375

Journal Entry:
```
Debit: Organization Expenses [tex]$45,000 Credit: Common Stock $[/tex]8,625
Credit: Paid-in Capital in Excess of Par [tex]$36,375 ``` ### (e) The stock had a par value of $[/tex]7.50 per share and was issued for land worth [tex]$45,000. Explanation: - Par Value of stock = $[/tex]7.50 per share
- Total Shares Issued = 1,150 shares
- Value of Land = [tex]$45,000 Calculations: - Common Stock at Par Value = $[/tex]7.50 * 1,150 = [tex]$8,625 - Additional Paid-in Capital = Value of Land - Common Stock at Par Value = $[/tex]45,000 - [tex]$8,625 = $[/tex]36,375

Journal Entry:
```
Debit: Land [tex]$45,000 Credit: Common Stock $[/tex]8,625
Credit: Paid-in Capital in Excess of Par $36,375
```