Question

Blue Spruce Corp. issued 900 shares of no-par common stock for $17,100. Which of the following journal entries would be made if the stock has no stated value?

Answer 1

The appropriate journal entry for Blue Spruce Corp.'s no-par common stock issuance is a debit to Cash for $17,100 and a credit to Common Stock for the same amount, reflecting an increase in both cash and equity.

Step-by-step explanation:

The student's question pertains to accounting for the issuance of common stock by Blue Spruce Corp. The appropriate journal entry for issuing 900 shares of no-par common stock at a total value of $17,100 when the stock has no stated value is to debit Cash for $17,100 and credit Common Stock for $17,100. This transaction indicates an infusion of cash into the company in exchange for shares of ownership in the company.

These journal entries would be recorded in the company's general ledger and would reflect an increase in the company's equity as well as its cash balance, influencing the balance sheet of Blue Spruce Corp.