Question

Alt Corp. issues 3,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to:

Answer 1

Credits are made to Common Stock $30,000 and Paid in capital in excess of Par value $12,000

Step-by-step explanation:

The journal entry is shown below;

Cash $42,000 (3,000 shares at $14)

To Common Stock $30,000 (3,000 shares at $10)

To Paid in capital in excess of par value $12,000 (3,000 shares at $4)

(Being issuance of the common stock is recorded)

Here cash is debited as it increased the assets and credited the common stock & paid in capital as it also increased the stockholder equity