Question

Kingbird, Inc. sells 450 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $50 a share. Kingbird sold the shares for $51 a share. The entry to record the sale is:_____.

Answer 1

Debit : Cash $22,950

Credit : Common Stock $22,950

Step-by-step explanation:

When shares were held sorely for investment, on date of sale, we simply record the cash proceeds and no gain on sale of shares is recognized.

Therefore, Cash Proceeds = $51 x 450 shares = $22,950