The Harvester Company issued 40 shares trading at $20/share to its accountant in full payment for her $900 fee for assisting in setting up the new company. The entry to record the issuance of the stock would include a:

Question

Quizplus · Accepted Answer

When a company issues shares to pay for services or goods, it is recorded as a stock issuance transaction. The shares are credited to the Common Shares account, which represents equity in the company. The value of the shares issued is multiplied by the number of shares issued to arrive at the credit amount. In this case, the value of 40 shares at $20 per share is $800, which is credited to Common Shares. Since the payment is made in full, there is no additional debit required, and therefore, the answer is C.

The Harvester Company Issued 40 Shares Trading at $20/share to Its