Dave Matthew Inc. issues 500 shares of $10 par value common stock and 100 shares of $100

Question:

Dave Matthew Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $100,000.

Instructions

(a) Prepare the journal entry for the issuance when the market value of the common shares is $165 each and market value of the preferred is $230 each. (Round to nearest dollar.)

(b) Prepare the journal entry for the issuance when only the market value of the common stock is known and it is $170 per share.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... 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,...