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A stock purchase agreement typically includes the following information: Your business name. The name and mailing address of the entity buying shares in your company's stocks. The par value (essentially the sale price) of the stocks being sold. The number of stocks the buyer is purchasing.
A company issues common stock to raise money, so the debit will always be to cash. There will always be a credit to common stock for the # of shares issued x the par value. Additional paid-in capital (APIC) is the plug.
The journal entry for issuing preferred stock is very similar to the one for common stock. This time Preferred Stock and Paid-in Capital in Excess of Par - Preferred Stock are credited instead of the accounts for common stock.
The journal entry for issuing preferred stock is very similar to the one for common stock. This time Preferred Stock and Paid-in Capital in Excess of Par - Preferred Stock are credited instead of the accounts for common stock. ? Cash is an asset account that is increasing.
The issuance of preferred stock is accounted for in the same way as common stock. Par value, though, often serves as the basis for specified dividend payments. Thus, the par value listed for a preferred share frequently approximates fair value.
Journal Entries DateParticulars(ii) For allotment of sharesPreference Share Application A/cTo Preference Share Capital A/c(Being transfer of the application money to share capital account)(iii) For making the allotment money (second installment) duePreference Share Allotment A/c26 more rows