COT Industries issued 27 million of its $1 par common shares for $488 million on April 11. Legal, promotional, and accounting services necessary to effect the sale cost $2 million.
Prepare the journal entry to record the issuance of the shares.
The share issue increases the cash balance of the company if shares are issued for cash. The amount received on share issue in-excess of par value is recorded separately from the common stock. The issue expense is recorded as a miscellaneous expense.
Answer and Explanation:
Record journal entry as follows: -
|Additional paid-in capital||$461|
|(Being share issue recorded)|
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from Accounting 101: Financial AccountingChapter 11 / Lesson 5