Question

Bing Inc.'s charter authorizes 500 shares of stock with no par value. Bing Inc. sells 100 shares of stock at its initial offering for $5 per share. The journal entry to record this transaction will include a (debit/credit) blank to common stock for blank.

a) Debit; $2,500
b) Credit; $2,500
c) Debit; $500
d) Credit; $500

Answer 1

The journal entry to record the sale of 100 shares of stock by Bing Inc. at its initial offering for $5 per share would be a Credit to Common Stock for $500. The correct answer is d) Credit; $500.

Step-by-step explanation:

The journal entry to record the sale of 100 shares of stock by Bing Inc. at its initial offering for $5 per share would be a Credit to Common Stock for $500.

Since the stock is sold at $5 per share, the total amount received from the sale would be $5 x 100 shares = $500.

This amount will be credited or added to the Common Stock account in the company's journal entry.