Question

Western Wear Clothing issues 3,000 shares of its $0.01 par value common stock to provide funds for further expansion. Assuming the issue price is $11 per share, record the issuance of common stock.

Answer 1

Step-by-step explanation:

The journal entry to record the issuance of common stock is shown below:

Cash A/c Dr $33,000 ($3,000 × $11)

To Common Stock $30 ($3,000 × $0.01)

To Additional Paid-in Capital in excess of par - Common Stock $32,970

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

While issuing the stock, we debited the cash account and credited the common stock and additional paid-in capital account