Final answer:
The correct recordation of stock issuance to owners is a credit to Common Stock, which increases that equity account, while the corresponding debit is typically to Cash or another asset account that the company receives.
Step-by-step explanation:
The issuance of stock to owners would be correctly recorded in accounting with a credit to Common Stock. When a company issues stock, it is essentially selling shares of ownership in the company. A credit to Common Stock is the account that reflects the equity that shareholders have in the company, and it increases with credit because shareholders are providing cash or other assets in exchange for a share of ownership.
The other side of the entry would typically be a debit to Cash or another asset account, representing the assets received by the company.It is imperative not to confuse this transaction with dividends, investment revenue, or earnings from capital gains, as those are separate events that do not relate directly to the issuance of stock.