Question

A corporation issued for cash 100,000 shares of its $0.01 par value common stock for $450,000. Which of the following is the correct journal entry to record this transaction?

Answer 1

Answer:

cash = $450000                                 ........... debit

common stock =  1000                       .......... credit

paid in capital amount =  $449000 ............ credit

Step-by-step explanation:

given data

share = 100000

par value = $0.01

total selling price = $450,000

solution

here

here total selling price is $450000

so cash = $450000    ........... debit

and common stock will be

common stock = 100000 × 0.01

common stock =  1000       .......... credit

and paid in capital amount will be

paid in capital amount = selling price - common stock

paid in capital amount =  $450000 - $1000

paid in capital amount =  $449000 ............ credit