The entry to record common stock issued at its par value includes a:
A) debit to Retained Earnings.
B) debit to Common Stock.
C) credit to Retained Earnings.
D) credit to Common Stock.

Question

Quizplus · Accepted Answer

The entry to record common stock issued at its par value includes a credit to Common Stock because this account represents the value of the shares being issued. There is no need for a debit to Retained Earnings because this account represents the accumulated profits or losses of the company and is not affected by the issuance of new shares at par value.

The Entry to Record Common Stock Issued at Its Par