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. 1. the stock has neither par nor stated value. 2. the stock has a s2 par value. 3. the stock has a ss stated value.

1.  Debit      Cash                                    $152,000

   Credit     Common stock                    $152,000

Being Issue of 19,000 common stock at neither par nor stated value

2.  Debit      Cash                                    $152,000

    Credit     Common stock                     $38,000

    Credit     Additional paid-in capital    $114,000

Being Issue of 19,000 common stock at $2 par value

3.  Debit      Cash                                       $152,000

    Credit     Common stock                        $95,000

    Credit     Additional paid-in capital        $57,000

Being Issue of 19,000 common stock at $5 stated value

Explanation:

1. The stock has neither par nor stated value

When stock has neither par nor stated value, the entire proceeds of issue are credited to common stock account.  

JOURNAL ENTRY

      Debit      Cash                                    $152,000

      Credit     Common stock                    $152,000

Being Issue of 19,000 common stock at neither par nor stated value

2. The stock has a $2 par value

Compute the par value, any excess of issue proceed over par value is credited to 'additional paid-in capital' account or any shortage is debited to 'discount on common stock' account.  

Par Value                         =   Number of shares issued X Par value

Par Value = 19,000 X $2 =   $38,000

Additional paid-in capital =   Issued value - Par Value  

                                           = $152,000 - $38,000 = $114,000

JOURNAL ENTRY

    Debit      Cash                                    $152,000

    Credit     Common stock                     $38,000

    Credit     Additional paid-in capital    $114,000

Being Issue of 19,000 common stock at $2 par value

3. The stock has a $5 stated value.

First compute the par value as in 2 above  

Par Value                          =   Number of shares issued X Par value

Par Value = 19,000 X $5  =   $95,000

Additional paid-in capital  =   Issued value - Par Value  

                                           = $152,000 - $95,000 = $57,000

JOURNAL ENTRY

    Debit      Cash                                    $152,000

    Credit     Common stock                     $95,000

    Credit     Additional paid-in capital     $57,000

Being Issue of 19,000 common stock at $5 stated value

Note, the amount that goes to the common stock account must be par value of share issued.