Question

When a company issues 25,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would include: Multiple Choice A credit to Common Stock for $250,000. Incorrect A debit to Cash for $25,000. A debit to Additional Paid-in Capital for $25,000. A credit to Additional Paid-in Capital for $225,000.

Answer 1

Answer:

A credit to Common Stock for $25,000

Explanation:

Based on the information given in a situation where a company issues 25,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would include:A credit to Common Stock for $25,000

Dr Cash $250,000

Cr Common Stock 25,000

Cr Additional Paid-In Capital 225,000

($250,000-25,000)