Several independent transactions are as follows. 1. 10,000 Shares of no-par common stock are issued for $50

Question:

Several independent transactions are as follows.

1. 10,000 Shares of no-par common stock are issued for $50 per share.

2. 10,000 Shares of $1 par value common stock are issued for $40 per share.

3. 10,000 Shares of $10 par value common stock are issued for $30 per share.

4. 5,000 Shares of no-par preferred stock are issued for $80 per share.

Required:

(a) Prepare journal entries for each transaction.

(b) What is the significance of par value from a financial accounting standpoint? Is par value significant in any economic sense?

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,...