Question

A corporation issued for cash 100,000 shares of its $0.01 par value common stock for $450,000. Which of the following is the correct journal entry to record this transaction?

Answer 1

cash = $450000 ........... debit

common stock = 1000 .......... credit

paid in capital amount = $449000 ............ credit

Explanation:

given data

share = 100000

par value = $0.01

total selling price = $450,000

solution

here

here total selling price is $450000

so cash = $450000 ........... debit

and common stock will be

common stock = 100000 × 0.01

common stock = 1000 .......... credit

and paid in capital amount will be

paid in capital amount = selling price - common stock

paid in capital amount = $450000 - $1000

paid in capital amount = $449000 ............ credit