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: a credit of $10,000 to common stock. a credit of $50,000 to common stock. a debit of $10,000 to common stock. a debit of $50,000 to common stock.

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

Accounting Mar 19, 2021

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.

Expert Solution

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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