Question

Velesaca Inc. issues 6,000 shares of common stock for $96,000. The stock has a stated value of $4 per share. The journal entry to record the stock issuance would include a:

	a.	credit to Common Stock for $24,000
	b.	credit to Cash for $96,000
	c.	credit to Paid-In Capital in Excess of Par for $24,000
	d.	credit to Common Stock for $96,000

Answer 1

	Correct Option A. credit to Common Stock for $24,000
	No. of Common stock issued	6,000
	Stated Rate	4
	Amount to be credit to common stock	24,000
	Note: Differencial amount of $72000 (96000 - 24000) will be credited to "Paid-In Capital in Excess of Par" account
	Correct Entry would be
	Accounts Name	Debit	Credit
	Cash	96,000
	Common Stock		24,000
	Paid-In Capital in Excess of Par		72,000
	(To record issue of common stock)