Carolina Corporation just issued 10,000 shares of $2 par value common stock for $7.50 per share.The journal entry to record this transaction will include all of the following except:

Question

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A credit to Retained Earnings is not necessary when recording the issuance of common stock. Retained Earnings represent the accumulated earnings of the company and are not affected by the issuance of new stock. The journal entry to record the transaction would be:

Debit Cash $75,000
Credit Common Stock $20,000
Credit Paid-in-Capital in Excess of Par--Common Stock $55,000

Carolina Corporation Just Issued 10,000 Shares of $2 Par Value