Recording a stock issuance in exchange for cash involves:
A) Debiting Cash and crediting Notes Payable
B) Debiting Cash and crediting Dividends
C) Debiting Cash and crediting Common Stock
D) Debiting Common Stock and crediting Cash
E) None of the above

Question

Quizplus · Accepted Answer

When a company issues stock in exchange for cash, it increases its cash account (an asset) and increases its common stock account (an equity account). This is recorded by debiting Cash and crediting Common Stock.

Recording a Stock Issuance in Exchange for Cash Involves