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The journal entry to issue 1,000,000 shares of $5 par common stock for $9 per share on July 2 would be _______.a. July 2Cash5,000,000 Common Stock5,000,000 b. July 2Cash9,000,000 Common Stock9,000,000 c. July 2Cash5,000,000 Paid-In Capital in Excess of Par—Common Stock4,000,000 Common Stock9,000,000 d. July 2Cash9,000,000 Common Stock5,000,000 Paid-In Capital in Excess of Par—Common Stock4,000,000

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akiran007

Answer:

d. July 2            Cash              9,000,000

                            Common Stock   5,000,000

Paid-In Capital in Excess of Par—Common Stock 4,000,000

Explanation:

Cash is debited with 9,000,000

Common Stock is credited with   5,000,000

and also Paid-In Capital in Excess of Par—Common Stock  credited with  4,000,000

Preferred stock usually has a par value. Like common stock it can be sold at  a price different from par. Preferred stock is recorded in its own separate contributed capital accounts.

The preferred stock accounts are included as a part of contributed capital.The entries for issuing preferred stock for non cash assets are similar to those for common stock.

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