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

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