Question

A corporation sold 16,500 shares of its $10 par value common stock at a cash price of $13 per share. The entry to record this transaction would include: Multiple Choice A debit to Paid-in Capital in Excess of Par Value, Common Stock for $214,500. A credit to Paid-in Capital in Excess of Par Value, Common Stock for $379,500. A debit to Cash for $165,000. A credit to Common Stock for $165,000. A credit to Common Stock for $214,500.

Answer 1

A credit to Common Stock for $165,000

Step-by-step explanation:

The journal entry is shown below

Cash (16,500 shares × $13) $214,500

To Common stock (16,500 shares × $10) $165,000

To Additional paid in capital in excess of par value (16,500 shares × $3)

$49,500

(being the issuance of the common stock is recorded)

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

Therefore the A credit to Common Stock for $165,000 is the correct option