If Vaughan Corporation issues 4000 common shares for $213000, which account will be credited? Contributed Surplus Common Shares Cash Retained Earnings

Accounting Dec 18, 2020

If Vaughan Corporation issues 4000 common shares for $213000, which account will be credited?

Contributed Surplus

Common Shares

Cash

Retained Earnings

Expert Solution

Answer

If Vaughan Corporation issues 4000 common shares for $213000, Common Shares account will be credited.

Explanation

Assume that common shares are issued at par. So, When common shares are issued then Cash is debited and common stock is credited.

And here Contributed capital is sum of common shares and additional paid-in-Capital. This itself is not credited it's components i.e. Common shares, paid-in-capital.

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote