Question

A corporation sold 14,000 shares of its $10 par value common stock at a cash price of $13 per share. The entry to record this transaction would include:

Answer 1

Date Description and Explanation Debit Credit

Cash $182,000

Common stock $140,000

Additional paid-in capital $42,000

(To record the issuance of equity shares)

Step-by-step explanation:

Additional capital = (Issue price - Par value) * Shares issued

= ($13−$10) * 14,000 shares

= $3 * 14,000 shares

= $42,000

Face value = Shares issued * Par value

= 14,000 shares * $10 per share

= $140,000