Question

Bentley Corporation received cash from issuing 12 comma 000 shares of common stock at par on January​ 1, 2018. The stock has a par value of $ 0.01 per share. Which is the correct journal entry to record this​ transaction?
A) Cash is credited for $16,000 and common stock - $0.01 par value is debited for $16,000
B) Cash is debited for $160, and common stock - $0.01 par value is credited for $160
C) Paid-In capital in excess of par - common is debited for $15,840, and common stock-$0.01 par value is credited for $15,840
D) Cash is debited for $16,000 common stock - $0.01 par value is credited for $160 and paid- in capital in excess of par - common credited for $15,840

Answer 1

Answer:

Option B is correct for entry but value is wrong value should be $120

Explanation:

The options provided are not correct, where shares are issued at par value no additional capital is credited.

As the number of shares = 12,000

Par value per share = $0.01

Total par value = $0.01 $\times$ 12,000 = $120

Therefore, issue of shares entry will be

Cash A/c Dr.                 $120

        To Common Stock             $120

Thus no option is correct, as for the entry option B is correct but the values are wrong.