Question

Dan Corp. issued 5,000 shares of common stock at a stated value of $10 per share,...

Dan Corp. issued 5,000 shares of common stock at a stated value of $10 per share, where stock was sold for $15 per share. The journal entry to record this transaction would include: *

Debit to Cash for $75,000

Credit to Common Stock for $150,000

Debit Paid-in Capital in Excess of Par Value for $25,000

Credit to Common Stock for $75,000

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Answer #1
Notes:
Issue of Stock
Par Value of the common Stock(5000 Shares X $ 10) $50,000
Paid in Capital in Excess of par (5000 Shares X $ 5) $2,500
Cash Received (5000 Shares X $ 15) $75,000
Solution:
Journal entry of the given question is as below,
Journal Entries
Date Account Title and explanation Debit Credit
------ Cash $75,000
       Common Stock $50,000
       Paid in Capital in Excess of par $25,000
Answer = Option 1 = Debit to Cash for $ 75,000
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