Question

Niren authorizes $1,000,000 shares of stock at a par value of $1 per share. Niren sells 100 shares of stock at its initial offering for $1 per share. The journal entry to record this will incude a _____ to Common stock, $1 par for $____.

Answer 1

Answer:

Credit; $100

Explanation:

When the shares are authorized there is no specific entry,

When the authorized shares are issued then proceeds are debited to the cash account and the common stock account is credited by that amount.

In this case,

Common Stock will be credited by 100 * 1 =$100

Hope that helps.