BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
28 views

Scarecrow Inc. issues 50,000 shares of $2 par value common stock. The shares are sold for $25 per share. Prepare the journal entry to record the issuance of the stock.

To determine

Prepare the journal entry to record the issuance of the stock.

Explanation

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Accounting rules for Journal entries:

  • To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
  • To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains

Issuance of stock:

It refers to the number of shares that are sold to the stockholders from number of shares authorized for issuance by the company.

Common stock:

These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend

Record the journal entry:

Date

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

How are direct-mail and e-mail sales messages similar, and how are they different?

Essentials of Business Communication (MindTap Course List)

Label the blanks in the column heads as either Debit or Credit.

College Accounting (Book Only): A Career Approach

CORPORATE VALUE MODEL Assume that today is December 31, 2014, and that the following information applies to Ver...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)