Company A received cash and issued stock to a new stockholder.In recording this transaction:
A)Cash would be debited.
B)Common Stock would be debited.
C)Cash would be credited.
D)Retained Earnings would be credited.

Question

Quizplus · Accepted Answer

When a company receives cash and issues stock to a new stockholder, the company is essentially selling a portion of its ownership in exchange for cash. Cash is received, which is an asset, and therefore should be debited. The company is also issuing new shares of stock, which increases the amount of equity in the company, and therefore Common Stock should be credited.

Company a Received Cash and Issued Stock to a New