Sigma Company is authorized to issue 100,000 shares of common stock. The company sold 5,000 shares at

Question:

Sigma Company is authorized to issue 100,000 shares of common stock. The company sold 5,000 shares at $12 per share. Prepare journal entries to record the sale of stock for cash under each of the following independent alternatives:
(1) The stock has a of $5,
(2) The stock has no but 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,...