Question

Prepare the journal entry to record Zende Company’s issuance of 75,000 shares of \(5 par value common stock assuming the shares sell for:

a. \)5 cash per share.

b. $6 cash per share

Short answer

(a) Cash account will be debited and common stock account will be credited by $375,000 respectively.

(b) Cash account will be debited by $450,000, common stock account will be credited by $375,000, and paid in capital excess of par will be credited by $75,000.

Step-by-step solution

Recoding of Journal Entries - Zende Company’s issuance of 75,000 shares at $ 5 Per Share

Date	Account and explanation	Debit	Credit
	Cash	$ 375,000
	Common Stock, $5 Par Value (75,000 x $5)		$ 375,000
	Issued 75,000 shares of $5 par value common stock at par value

Recoding of Journal Entries - Zende Company’s issuance of 75,000 shares at $ 6 Per Share

Date	Account and explanation	Debit	Credit
	Cash	$ 450,000
	Common Stock, $5 Par Value (75,000 x$5)		$ 375,000
	Paid-In Capital in Excess of Par Value, Common Stock (75,000 x $1)		$ 75,000
	Issued 75,000 shares of $5 par value common stock at $ 6 per share.