AI-generated answer
To record the issuance of 100 shares of $10 par value common stock for cash at $10 per share, the following journal entry can be made:
Date: January 2
Account Titles | Debit | Credit
---|---|---
Cash | $1,000 |
Common Stock (10 x 100) | | $1,000
Step-by-step explanation:
- The debit to Cash represents the amount received from the sale of the shares. In this case, $10 per share multiplied by 100 shares equals $1,000.
- The credit to Common Stock represents the par value of the shares issued. The par value is the stated value of the shares, which in this case is $10 per share. Therefore, the total par value is $10 multiplied by 100 shares, resulting in a credit of $1,000.
This journal entry increases the Cash account by $1,000 and increases the Common Stock account by $1,000, reflecting the issuance of shares for cash.