QUESTION 17 A company issued 8,000 shares of $20 par value common stock for $200

Question

QUESTION 17 A company issued 8,000 shares of $20 par value common stock for $200,000. What would the journal entry be to record this sale? OA. Debit Cash $200,000, credit Capital Stock-Common $160,000; credit Retained Earnings $40,000 O B. Credit Cash $200,000; debit Capital Stock Common $160,000; debit Paid-In Capital in Excess of Par Value $40,000 OC. Debit Cash $200,000; credit Capital Stock-Common $160,000; credit Paid-In Capital in Excess of Par Value $40,000 OD.Debit Cash $200,000; credit Capital Stock-Common $200,000

Explanation / Answer

Journal Entry:

Cash a/c Dr $ 200000

To Capital stock common $ 160000

8000 shares * $ 20 par value

To Retained earnings $ 40000

( Being 8000shares are issued )

Hence the answer is - " A "

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