Reference no: EM133901529

Problem

In order to encourage employee ownership of the company's $3.50 par common shares, Kalamata Distribution permits any of its employees to buy shares directly from the company. There are no brokerage fees and shares can be purchased at a 5% discount. During January, employees purchased 50,000 shares at a time when the market price of the shares on the New York Stock Exchange was $38.50 per share. Shares purchased 50,000 Common shares Par value per common share $3.50 Market value per share on NYSE on date of purchase $38.50 Employee discount percentage 5%. Get the instant assignment help. Prepare the appropriate journal entry to record the January purchase of shares under the employee share purchase plan. Date General Journal Debit Credit January 31 Cash Compensation expense Common stock Paid-in capital - excess of par, common.