Gothic Architecture is a new chain of clothing stores specializing in the color black. Gothic issues 1,000 shares of its $1 par value common stock at $22 per share. Record the issuance of the stock. How would the entry differ if Gothic issued no-par value stock

Gothic Architecture

General Journal:

Debit Cash Account $22,000

Credit Common Stock $1,000

Credit Additional Paid-in Capital $21,000

To record the issuance of 1,000 shares, $1 par value at $22 each.

If Gothic issued no-par value stock, the entries would change to

Debit Cash Account $22,000

Credit Common Stock $22,000

To record the issuance of 1,000 shares at $22 each.

Explanation:

The par value is the nominal value at which shares are issued.  Shares can be issued at the par value, above par value (premium), and below par value (discount).

The difference between par value and above or below par value is recorded in another account called the Additional Paid-in Capital account.  This helps maintain the Issued Stock account at its par value.

a

b

b

a

c

b

d

d

none of these are correct, as they are all sources of american law

a

answer; lags, push the econ below the natural level of output;