Question

New Corp. issues 2,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to Group of answer choices Common Stock $20,000 and Paid-in Capital in Excess of Stated Value $8,000. Common Stock $28,000. Common Stock $20,000 and Paid-in Capital in Excess of Par $8,000. Common Stock $20,000 and Retained Earnings $8,000.

Answer 1

Answer:

Common Stock $20,000 and Paid-in Capital in Excess of Par $8,000.

Explanation:

The journal entry to record the issuance of the shares is given below:

Cash Dr (2000 shares × $14) $28,000

   To Common stock (2000 × $10) $20,000

    To Paid in capital in excess of par value (2000 × 4) $8,000

(being the issuance of the shares is recorded)

Here the cash is debited as it increased the assets and rest 2 account is credited as it also increased the equity