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  • Acctg 2.2 Journal Entries - Cs Transactions

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    kim Tammy
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    The document discusses accounting for par value and no-par value shares. For par value shares sold for cash, share capital is credited for the par value amount and any excess is recorded as share premium. For non-cash consideration, total consideration is considered and any excess over par value is share premium. For no-par shares with a stated value, proceeds above stated value may be recorded as share premium, while any deficit results in a discount. For no-par shares without stated value, all proceeds are credited to share capital.

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    Accounting journal entries

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    Acctg 2.2 journal entries.cs transactions

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    The document discusses accounting for par value and no-par value shares. For par value shares sold for cash, share capital is credited for the par value amount and any excess is recorded as share premium. For non-cash consideration, total consideration is considered and any excess over par value is share premium. For no-par shares with a stated value, proceeds above stated value may be recorded as share premium, while any deficit results in a discount. For no-par shares without stated value, all proceeds are credited to share capital.

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    20 views4 pages

    Acctg 2.2 Journal Entries - Cs Transactions

    Uploaded by

    kim Tammy
    The document discusses accounting for par value and no-par value shares. For par value shares sold for cash, share capital is credited for the par value amount and any excess is recorded as share premium. For non-cash consideration, total consideration is considered and any excess over par value is share premium. For no-par shares with a stated value, proceeds above stated value may be recorded as share premium, while any deficit results in a discount. For no-par shares without stated value, all proceeds are credited to share capital.

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    of 4

    ACCOUNTING FOR PAR VALUE SHARES

    A. FOR CASH
    Rule: When shares with par value are sold, the proceeds should be credited to the share capital
    account to the extent of the par value of the shares, with any excess being reflected as share premium.

    * Cash/Subscription receivable = # of shares issued/subscribed x Issue Price/Subscription Price


    ** Share Capital/Subscribed Share Capital = # of shares issued/subscribed x par value
    *** If Cash/Subscription receivable (TC) > PV = Share Premium
    *** *If Cash/Subscription receivable (TC) < PV = Discount

    Outright Payment Through Subscription


    Upon Subscription:
    At Par Value At Par Value

    Cash* xx Subscription Receivable* xx


    Share Capital** xx Subscribed Share Capital** xx

    Above Par Value Above Par Value


    Cash* xx Subscription Receivable* xx
    Share Capital** xx Subscribed Share Capital** xx
    Share Premium xx Share Premium xx

    Below Par Value Below Par Value


    Cash* xx Subscription Receivable* xx
    Discount on Share Capital xx Discount on Share Capital xx
    Share Capital** xx Subscribed Share Capital** xx

    Upon Collection:
    Cash xx
    Subscription Receivable xx

    Upon Issuance of Certificate:


    Subscribed Share Capital xx
    Share Capital xx

    B. FOR NON-CASH CONSIDERATION


    * Total Consideration (in the order of priority)
    1st Fair market value of the noncash consideration received
    2nd Fair market value of the shares issued (# of shares x FMV)
    rd
    3 Par value of the shares issued (# of shares x PV)

    ** If TC > PV = Share Premium ***Share Capital (# of shares issued x par value)


    *** If TC < PV = Discount
    At Par Value Above Par Value Below Par Value
    Non-cash consideration* xx Non-cash consideration* xx
    Non-cash consideration* xx Share Capital xx Discount on Share Capital xx
    Share Capital xx Share Premium xx Share Capital xx

    Page 1 of 4
    Prepared by: Mrs. Lucia A. Suello, CPA, MBA
    ACCOUNTING FOR NO-PAR VALUE SHARES

    I. NO PAR, WITH STATED VALUE


    Rule: When shares without par value are sold, the proceeds should be credited to the share capital
    account. If the nor par stock has a stated value, the excess proceeds over stated value may
    alternatively credited be to share premium.

    A. FOR CASH

    * Total Consideration = # of shares issued/subscribed x Issue Price/Subscription Price


    ** If TC > SV = Share Premium-SV
    *** If TC < SV = Discount

    Outright Payment Through Subscription


    Upon Subscription:
    At Stated Value At Stated Value

    Cash* xx Subscription Receivable* xx


    Share Capital xx Subscribed Share Capital xx

    Above Stated Value Above Stated Value


    Cash* xx Subscription Receivable* xx
    Share Capital xx Subscribed Share Capital xx
    Share Premium-SV xx Share Premium –SV xx

    Below Stated Value Below Stated Value


    Cash* xx Subscription Receivable* xx
    Discount on Share Capital xx Discount on Share Capital xx
    Share Capital xx Subscribed Share Capital xx

    Upon Collection:
    Cash xx
    Subscribed Receivable xx

    Upon Issuance of Certificate:


    Subscribed Share Capital xx
    Share Capital xx

    Page 2 of 4
    Prepared by: Mrs. Lucia A. Suello, CPA, MBA

    B. FOR NON-CASH CONSIDERATION

    * Total Consideration (in the order of priority)


    1st Fair market value of the noncash consideration received
    2nd Fair market value of the shares issued (# of shares x FMV)
    rd
    3 Appraised value of the property
    4th Stated value of the shares issued (# of shares x SV)

    ** If TC > SV = Share Premium-SV


    *** If TC <SV = Discount

    At Stated Value Above Stated Value Below Stated Value

    Non-cash consideration* xx Non-cash consideration* xx Non-cash consideration* xx


    Share Capital xx Share Capital xx Discount on Share Capital xx
    Share Premium-SV xx Share Capital xx

    II. NO PAR, NO STATED VALUE


    Rule: Entire amount received on the sale shall be credited to the share capital account.

    A. FOR CASH
    * Total Consideration = # of shares issued/subscribed x Issue Price/Subscription Price

    Outright Payment Through Subscription


    Upon Subscription:
    Cash* xx Subscription Receivable* xx
    Share Capital xx Subscribed Share Capital xx

    Upon Collection:
    Cash xx
    Subscription Receivable xx

    Upon Issuance of Certificate:


    Subscribed Share Capital xx
    Share Capital xx

    B. FOR NON-CASH CONSIDERATION


    * Total Consideration (in the order of priority)
    1st Fair market value of the noncash consideration received
    2nd Fair market value of the shares issued (# of shares x FMV)
    rd
    3 Appraised value of the property

    Non-cash consideration* xx
    Share Capital xx

    Page 3 of 4
    Prepared by: Mrs. Lucia A. Suello, CPA, MBA

    Page 4 of 4

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