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Homework answers / question archive / Alice's 13th Street restaurant issued 10,000 of $1 par value common stock for $5 per share

Alice's 13th Street restaurant issued 10,000 of $1 par value common stock for $5 per share

Accounting

Alice's 13th Street restaurant issued 10,000 of $1 par value common stock for $5 per share. The journal entry to record this transaction would include:

    1. a credit of $10,000 to common stock.
    2. a credit of $50,000 to common stock.
    3. a debit of $10,000 to common stock.
    1. a debit of $50,000 to common stock.

 

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Answer:

a .

Step-by-Step explanation

Journal entry when shares are issued :

Cash  A/c    Dr .   $ 50,000
       To Common Stock     $ 10,000
        To Excess paid in capital  $ 40,000

 

Hence Option A is the correct answer.

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