Answer:
a
Dr Cash ($18 x 36,000 shares) $ 648,000
Cr Common Stock ($2 x 36,000 shares) $72,000
Cr Share premium ($16,000 x 36,000 shares) $576,000
b
Dr Cash ($18 x 36,000 shares) $648,000
Cr Common Stock ($2 x 36,000 shares) $ 72,000
Cr Share premium ($16 x 36,000 shares) $576,000
Explanation:
On both situations the journal entries remain the same.
The cash amount received of $648,000 shall be debited while the nominal values of the shares of $2 each shall be credited to the share capital account and the balance of $16 each shall be credited to share premium.
