Accounting for the Issuance of Shares of Stock

Learning Objectives
Share Capital
Reserves
Retained Earnings
Accounting Terminologies and Titles related to the
Shareholders’ Equity Section
The following books and records are maintained by the corporation:
Two methods of accounting for share capital
ILLUSTRATION
Accounting for No-par Value Shares
Journal Entries and Balance Sheet for Single Type of Stock
with Par Value
The Example Corporation was organized by the Securities and Exchange Commission to
issue 50,000 shares of common stock with a par value of P 100.00 per share on July 30,
2014.
After posting, the general ledger will show:
The balance sheet should be presented like this:
Journal Entries and Balance Sheet for Two Types of Stock
with Par Value
Accounting for share capital, non-cash assets accepted
Tasks:
50.000 25,000
450,000 225,000

250,000
Accounting for share capital, price in excess of par value
Computation of Subscription:
Computation of Share Premium: