Question

Rush, lnc.'s charter authorized 500,000 shares of stock with a par value of $1 per share. Rush issues 10 shares at a market value of $10 per share. Thie journal entry to record this transaction will include a _______ (debit/credit) to the Common Stock, $1 par account in the amount of $10

Answer 1

Credit

Step-by-step explanation:

The Common Stock Account is a also known as the stockholder's equity account.

Equity accounts maintain Credit balances with the corresponding Debit entries going to the Cash Received Account when the payment is made for the issued shares.

In the case of Rush Inc's issue of 10 shares at the Market Price of $10, the first entry in the Common Stock account is a Credit entry. Once, the corresponding debit entry will go the Cash Account.