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Homework answers / question archive / Wynola, Inc

Wynola, Inc

Accounting

Wynola, Inc. issued 1,000 shares of common stock at $10 per share. If the stock has a par value of $4 per share, the journal entry to record the issuance would include a:

    1. debit to Retained Earnings for $6,000.
    2. debit to Cash for $4,000.
    3. credit to Paid-in Capital for $10,000.
    4. credit to Common Stock for $4,000.

 

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Answer:

d .

Step-by-Step explanation

To record the journal entry for the issuance of shares is as follows:

Cash A/c                                                            Dr $10,000

     To common stock A/c (1,000 × $4)                                  $4,000

      To paid in capital A/c (1,000 × $6)                                  $6,000

Hence, option d is correct.

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