Answer :
Answer:
a). The record of the issuance of the stock is debit to cash for $30,000, credit to common stock for $1,000 and credit to excess of common stock of $29,000.
b). If the Gothic company issued no-par value stock, the entry would be a debit for the total amount of cash received from the issue which will be ($30,000) and to balance the account, a credit to Common Stock for the $30,000 also. The paid in capital in excess of common stock would not be credited.
Explanation:
A. Entries of the stock
1. Account(cash)
Cash=1000 shares at $30 per share
Cash=1,000×30=$30,000
Debit=$30,000
Credit this account=$0
2. Account (common stock)
Common stock=1,000 shares at $1 per value common stock
Common stock=1,000×1=$1,000
Credit account=$1,000
Debit this account=$0
3. Account (Paid-in Capital in Excess of Par - Common Stock)
Paid in capital in excess of par-common stock=30,000-1,000=$29,000
Credit this account=$29,000
Debit this account=$0
This can be written as;
Account Debit ($) Credit ($)
Cash (1,000 shares * $30 price) 30,000
Common Stock (1,000 shares * $1 par) 1,000
Paid-in Capital in Excess of Par - Common Stock 29,000
The record of the issuance of the stock is debit to cash for $30,000, credit to common stock for $1,000 and credit to excess of common stock of $29,000.
B.
If the Gothic company issued no-par value stock, the entry would be a debit for the total amount of cash received from the issue which will be ($30,000) and to balance the account, a credit to Common Stock for the $30,000 also. The paid in capital in excess of common stock would not be credited.