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Geronimo Company issued 20,000 shares of $1 par value common stock at $10 per share. Ms. Elgin, the bookkeeper, recorded this

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Answer #1

Correct Journal Entry

Cash $200,000 (20,000*$10)
Common stock $20,000 (20,000*$1)
Additional paid in capital - Common stock $180,000 (20,000*$9)

The answer is Additional paid in capital will be understated.

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