During its first year of operations, Riverbed Corp had these transactions pertaining to its common stock. Jan. 10 Issued 26,300 shares for cash at $4 per share. July 1 Issued 56,500 shares for cash at $7 per share. (a) Journalize the transactions, assuming that the common stock has a par value of $4 per share. (b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share.

Answer and Explanation:

The journal entries are shown below:

1.

On Jan.10

Cash (26,300 shares × $4) $105,200  

         To Common stock     $105,200

(Being the issuance of the common stock for cash is recorded)

On July 1

Cash (56,500 shares × $7)  $395,500  

        To Common stock (56,500 shares × $4) $226,000

        To Paid-in Capital in Excess of Par Value $169,500

(Being the issuance of the common stock for cash is recorded)

2.

On Jan.10

Cash (26,300 shares × $4)  $105,200  

      To Common stock (26,300 shares × $1)  $26,300

      To Paid-in Capital in Excess of Stated Value $78,900

(Being the issuance of the common stock for cash is recorded)

On July 1

Cash (56,500 shares × $7) $395,500  

        To Common stock  (56,500 shares × $1)  $56,500

        To Paid-in Capital in Excess of Stated Value $339,000

(Being the issuance of the common stock for cash is recorded)