Journalizing issuance of stock—at par and at a premium Colorado Corporation has two classes of stock: common, $3 par value; and preferred $30 par value.
Requirements
Journalize Colorado’s issuance of 4,500 shares of common stock for $6 per share.
Journalize Colorado’s issuance of 4,500 shares of preferred stock for a total of $135,000.

a.

Cash                                                                           27000 Dr

     Common Stock                                                            13500 Cr

     Paid in capital in excess of par-Common stock         13500 Cr

b.

Cash                                                    135000 Dr

     Preferred Stock                                   135000 Cr

Explanation:

a.

When we issue stock at premium, we always record the amount received from such issuance of stock at full. So, the cash account will be debited for 4500 * 6 = 27000

However, we record the common stock issued at par value and the remaining is credited under the reserve account which is Paid in capital in excess of par.

Thus the common stock will be credited by its par value of 4500 * 3 = 13500 and the remaining 4500 * 3 will be credited to the Paid in Capital account.

b.

The par value of the preferred stock is 4500 * 30 = 135000

Thus the preferred stock is issued at par and we simply debit the cash received from the issue and credit the preferred stock.

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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