Journal Entry for Stock Issuance

[@ngathebongo5876]

I was completely confused before i watched this, now i am empowered! gratitude!!

[@phowops]

You are a great teacher! Thank you

[@Nfletcher456]

So stock issuance costs aren't recorded as a separate entry, just reduced from cash and additional paid-in capital like it never existed?

[@manoftomorrow5987]

I’m wondering the same thing…I thought that the 800k would still go to the share capital Ac and the 50k to the expense. I’m confused, because the investors still paid you 800k for their share of the stock, the expenses have nothing to do with them.

[@TheMweezy28]

@@manoftomorrow5987 @Nfletcher456 The expenses do have to do with it, because without the stock issuance event the company would have never incurred this stock issuance cost of getting their lawyers, accounting firm, etc. involved. You take away the cost needed to issue your stock, which in this case was 50k to your lawyers, accounting firm, etc. from the proceeds you receive and record the whole thing transaction at net value: Gross cash proceeds/Additional Paid-In Capital - Cost needed to get this stock issuance process going = net value the company received from this stock issuance.

[@cab06215]

ASC-340-10-S99-1 (SAB Topic 5.A) said necessary costs like overheads and in this case the issuance fee are just directly subtracted from the original principal but maybe the accountant of each company would still record the transaction in the T account and general ledger, maybe?????

[@user-wc7em8kf9d]

Thks for sharing. Quick question: is the cost of treasury shares the WACC or the cost of equity?

[@Edspira]

Companies record treasury stock at the price they paid to repurchase the shares. For example, if a company paid $5/share to buy back 100 shares, the company would reduce its cash account by $500 (100 shares * $5/share) and record treasury stock of $500 (the treasury stock is a contra-equity account, which means it would decrease stockholders' equity by $500).

[@flake8382]

@@Edspira does that mean treasury stock is also valued using IFRS 9? At what point can the company cancel these shares and eliminate the corresponding equity?

[@flake8382]

Excellent! Tbh this is something I've needed to revise. Would you also consider a video demonstrating BCVR journal entries? :D

[@raccoon874]

*there is no way those two toilet seats would go up properly at the same time*