On 1 January Y Company Pty Ltd issued 100 000 shares for $2 each.The correct entry to record this transaction is:

Question

Quizplus · Accepted Answer

When a company issues shares, it receives money in exchange for the ownership of those shares. This money is recorded as share capital, which is a component of shareholder's equity. In this case, Y Company Pty Ltd issued 100,000 shares for $2 each, resulting in total cash receipts of $200,000. Therefore, the correct entry to record this transaction would be to debit bank $200,000 and credit share capital $200,000. Option B is the only choice that accurately reflects this.

On 1 January Y Company Pty Ltd Issued 100 000