A journal entry is the record of the financial transaction of a business in its financial books.
A journal entry is the record of the financial transaction of a business in its financial books. The business transactions are recorded in a journal indicating the debit and credit balances. These entries can help in the authentication of transactions and also helps to know if they are supported with bills.
The journal entry for Ayayai Inc. will be -
For the issuance of the stock -
Land A/c Dr 52,000. ( 13 × 4000)
To Common stock Ac 40,000 ( 10 × 4000)
To Paid in Capital A/c 12,000
( Being the issuance of stock recorded)
This journal entry shows that Ayayai got $52,000 in cash from the issuing of the shares and that this money was used to raise the company's common stock by $40,000 and its paid-in capital above par value by $12,000.
For the acquisition of the land -
Land A/c Dr 60,000
To Cash A/c. 60,000
( Being the and acquired)
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