Answer:
The Journal entry is as follows:
Cash Account Dr. $32,500
To common stock account $12,500
To Paid in capital in excess of common stock $20,000
(To record the issuance of the stock)
Workings:
Cash = 2,500 shares × $13 per share
= $32,500
Common stock = 2,500 × $5 per share
= $12,500
Paid in capital in excess of common stock:
= 2,500 × $8 per share
= $20,000
