Answer: A credit to common stock for $100,000.
Explanation:
From the question, we are informed that a corporation sold 10,000 shares of its $10 par value common stock at a cash price of $12 per share. The entry to record this transaction would include a credit to common stock for $100,000.
The journal would therefore be:
Debit cash account $120,000($10000 × 12)
Common stock will be $100,000 i.e ($10,000 × 10)
Paid-in Capital in the excess of par Value will be:
= $120,000 - $100,000
= $20,000
If a corporation sold 10,000 shares of its $10 par value common stock at a cash price of $12 per share. The entry to record this transaction would include: a credit to Common stock for $100,000.
The journal entry will be:
Debit Cash $120,000
(10,000 ×$12)
Credit Paid-in Capital in the excess of par value $20,000
[10,000×($12-$10)]
Credit Common stock $100,000
(10,000 × $10)
(To record issuance of shares )
Inconclusion if a corporation sold 10,000 shares of its $10 par value common stock at a cash price of $12 per share. The entry to record this transaction would include: a credit to Common stock for $100,000.
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