Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at $25 per share. The journal entry for this transaction would:

Question

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When a company issues common stock, it records the proceeds received from the issuance as a debit to Cash and a credit to Common Stock for the par value of the shares issued. Any excess over the par value is recorded as a credit to Additional Paid-in Capital. In this case, the journal entry would be a debit to Cash for $250,000 ($25 per share x 10,000 shares), a credit to Common Stock for $100 (par value of $0.01 x 10,000 shares), and a credit to Additional Paid-in Capital for $249,900 ($25 - $0.01 par value = $24.99 excess per share x 10,000 shares). Option D correctly reflects this entry.

Bradley Corporation Issued 10,000 Shares of Common Stock on January