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On May 10, Sheffield Corp. issues 2,500 shares of $5 par value common stock for cash at $12 per share.


Journalize the issuance of the stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

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Answer:

Explanation:

The journal entry to record the issuance of common stock is shown below:

Cash A/c Dr $30,000          (2,500 shares × $12)

    To Common Stock $12,500                 (2,500 shares × $5)

    To  Additional Paid-in Capital in excess of par - Common Stock $17,500

(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

While issuing the stock, we debited the cash account and credited the common stock and additional paid-in capital account

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