Question

Moonwalker Corporation issued 2,000 shares of its \(10 par value common stock for \)60,000. Moonwalker also incurred $1,500 of costs associated with issuing the stock. Prepare Moonwalker’s journal entry to record the issuance of the company’s stock.

Short answer

Cash account should be debited with credit account of common stock and paid-in capital in excess of par common stock.

Step-by-step solution

Meaning of Par Value

The term par value helps define the core value of a financial instrument for investment. This is even more useful for determining the profitability of an investment.

Preparing Journal Entries of Moonwalker to record the issuance of the company’s stock

Date	Particular	Folio	Debit USD $	Credit USD $
	Cash A/c ($60,000-$1,150) Dr.		58,500
	To common stock A/c (2,000$10) Cr.			20,000
	To paid-in capital in excess Cr. Of par common stock A/c			38,500
	(being share issued )