Asked by
Antonio Dumitrasconiu
on Oct 15, 2024
Verified
Comfort Mattresses,Inc.sold 26,000 shares of its $1 par value common stock at a cash price of $12 per share.The entry to record this transaction would be:
A) Debit Cash $312,000; credit Common Stock $26,000; credit Paid-in Capital in Excess of Par Value,Common Stock $286,000.
B) Debit Cash for $312,000; credit Common Stock $312,000.
C) Debit Common Stock $26,000; debit Paid-in Capital in Excess of Par Value,Common Stock $286,000; credit Cash $312,000.
D) Debit Cash $312,000; credit Stock Liability $286,000; credit Common Stock $26,000.
E) Debit Common Stock $26,000; credit Cash $26,000.
Par Value Common Stock
The nominal or face value assigned to common stock shares in the corporate charter, which may differ significantly from the market value.
Paid-in Capital
The amount of money that a company receives from selling its shares directly to investors, not including the stock value on secondary markets.
- Familiarize oneself with the process and accounting for the issuance of equity, including the understanding of par value, stated value, and capital surplus.
Verified Answer
AC
Learning Objectives
- Familiarize oneself with the process and accounting for the issuance of equity, including the understanding of par value, stated value, and capital surplus.