A company issues 1 million shares of common stock with a par value of $0.02 for $15 a share.The entry to record this transaction includes a debit to Cash for:
A)$20,000 and a credit to Common Stock for $20,000.
B)$15,000,000 and a credit to Common Stock for $15,000,000.
C)$15,000,000,a credit to Common Stock for $20,000,and a credit to Additional Paid-in Capital for $14,980,000.
D)$20,000,a debit to Capital Receivable for $14,980,000,a credit to Common Stock for $20,000,and a credit to Additional Paid-in Capital for $14,980,000.

Question

Quizplus · Accepted Answer

The entry to record the issuance of 1 million shares of common stock with a par value of $0.02 for $15 a share includes a debit to Cash for $15,000,000 (or 1,000,000 shares × issue price of $15.00 per share),a credit to Common Stock for $20,000 (or 1,000,000 shares × par value of $0.02 per share),and a credit to Additional Paid-in Capital for $14,980,000 [or 1,000,000 shares × (issue price of $15 per share − par value of $0.02 per share)].

A Company Issues 1 Million Shares of Common Stock with a Par