XYZ Corporation receives $100,000 from investors for issuing them shares of its stock. XYZ's journal entry to record this transaction would include a:

Question

Quizplus · Accepted Answer

When a corporation issues shares of its stock for cash, the account credited is Common Stock. This increases the amount of equity in the company but has no effect on revenues, investments or retained earnings. Therefore, the correct answer is C) Credit to common stock.

XYZ Corporation Receives $100,000 from Investors for Issuing Them Shares