Portland Sound Cafe began business on January 1, 2016.The corporate charter authorized issuance of 1,000 shares of no-par value common stock, of which 200 shares were issued, and 4,000 shares of $8 par value, 6% cumulative preferred stock, of which none were issued.Portland Sound sold 400 shares of common stock at $8 per share on May 1.The entry to record the issuance of the shares on May 1 will:

Question

Quizplus · Accepted Answer

The entry to record the issuance of 400 shares of no-par value common stock at $8 per share would increase Cash by $3,200 (400 shares x $8) and increase Common Stock by $3,200, as there is no par value or additional paid-in capital involved.

Portland Sound Cafe Began Business on January 1, 2016