Blue Moon Company is authorized to issue 100,000 shares of common stock. On August 1, the company

Question:

Blue Moon Company is authorized to issue 100,000 shares of common stock. On August 1, the company issued 5,000 shares at $25 per share. Prepare journal entries to record the issuance of stock for cash under each of the following alternatives:

(1) The stock has a par value of $25,

(2) The stock has a par value of $10,

(3) The stock has no par value,

(4) The stock has a stated value of $1 per share.

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...