When a company issues 25,000 shares of $1 par value common stock for $10 per share,the journal entry for this issuance would include:

Question

Quizplus · Accepted Answer

The company receives $250,000 in cash (25,000 shares x $10), so Cash is debited for $250,000. Common Stock is credited for the par value of $25,000 (25,000 shares x $1). The excess amount, $225,000, is credited to Additional Paid-in Capital.

When a Company Issues 25,000 Shares of $1 Par Value