Question

Niren, Inc.'s charter authorizes 1,000,000 shares of stock at a par value of $1 per share. Niren sells 100 shares of stock at its initial offering for $1 per share. The journal entry to record this transaction will include a (debit/credit)__________ to Common Stock, $1 par for $________.

Answer 1

credit to Common Stock, $1 par for $100.

Step-by-step explanation:

When a corporation issues new stock or sells stock held by their treasury department, they must record the sale at par value in the common stock account. Any extra money received should go under paid-in capital in excess of par value.

The complete journal entry would be:

Dr Cash account 100

Cr Common Stock account 100