When a person starts a corporation, the first thing they often do is open a bank...
When a person starts a corporation, the first thing they often do is open a bank account for the corporation. If the person invests $100,000 cash into the corporation in exchange for 1,000 shares of $.01 par value common stock, the corporation records this transaction in their general ledger accounts as follows - Debit Cash $100,000, Credit Common Stock $10, and Credit Paid-In-Capital (or otherwise Additional Paid-In-Capital) $99,990
A. True
B. False
Homework Answers
A. True
Debit Cash = $100000
Credit common stock = 1000 shares * $0.01 = $10
Credit Paid-In-Capital (or otherwise Additional Paid-In-Capital) = $100000 - $10 = $99990
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When a person starts a corporation, the first thing they often
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