Question

Which One of the Entries Below would be included in the Journal Entry to Record the Following Transaction.

A Corporation Issues 200,000 Shares of $1 par Value Common stock for $4, each

Answer 1

To record the transaction of a corporation issuing 200,000 shares of $1 par value common stock for $4 each, the journal entry would be a debit to cash and a credit to common stock and additional paid-in capital.

Step-by-step explanation:

In this transaction, the corporation is issuing 200,000 shares of $1 par value common stock for $4 each. To record this transaction, the journal entry would be:

Debit Cash: 200,000 shares x $4 = $800,000

Credit Common Stock (par value): 200,000 shares x $1 = $200,000

Credit Additional Paid-in Capital: $800,000 - $200,000 = $600,000