A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share.The issue price was $10 per share.The entry to record this transaction would be:
A)Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value,Common Stock $45,000; credit Common Stock $5,000.
B)Debit Cash $50,000; credit Common Stock $50,000.
C)Debit Common Stock $50,000; credit Cash $50,000.
D)Debit Treasury Stock $50,000; credit Cash $50,000.
E)Debit Common Stock $25,000; debit Paid-in Capital in Excess of Par Value,Common Stock $5,000; credit Common Stock $45,000.

Question

Quizplus · Accepted Answer

The entry to record the issuance of no par common stock with a stated value includes debiting the cash received, crediting the common stock account for the total number of shares issued, and crediting the paid-in capital in excess of stated value account for the difference between the issue price and the stated value per share. Therefore, option A accurately records the transaction.

A Corporation Issued 5,000 Shares of Its No Par Common