Office Space,Inc.sold 30,000 shares of its no-par value common stock at a cash price of $10 per share.The entry to record this transaction would be:
A)Debit Cash $300,000; credit Common Stock $300,000.
B)Debit Cash for $30,000; credit Common Stock $30,000.
C)Debit Common Stock $300,000; credit Cash $300,000.
D)Debit Cash $300,000; credit Preferred Stock $300,000.
E)Debit Cash $30,000; credit Preferred Stock $30,000.

Question

Quizplus · Accepted Answer

The company sold 30,000 shares of common stock at $10 per share for a total cash amount of $300,000. The proper journal entry would be to debit Cash for $300,000 and credit Common Stock for the same amount. Therefore, option A is the correct answer. Option B is incorrect because the cash received is for $300,000, not $30,000. Option C is incorrect because the original entry is to debit Cash, not Common Stock. Option D and E are incorrect because the company sold common stock, not preferred stock.