Question

A company issued 60 shares of $100 par value common stock for $7,000 cash. The journal entry to record the issuance is: Multiple Choice O Debit Cash $7,000; Credit Common Stock $7,000 Debit investment in Common Stock $7,000, credit Cash $7,000. O O Debit Cash $7,000; Credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value, Common Stock $1,000 O O Debit Common Stock $6,000, debit Investment in Common Stock $1,000, credit Cash $7,000. O O Debit Cash $7,000, credit Paid in Capital in Excess of Par Value, Common Stock $6,000, credit Common Stock $1,000.

Answer 1

Correct answer----------Debit cash $7000; Credit common stock $6000; credit paid in capital in excess of par value,common stock $1000.

.

Common stock will be credited by par value per common stock times the number of shares issued. (60 x 100=$6000.)

Paid in capital in excess of par is as the name suggest cash received in excess of par (7000-6000=$1000).