{"id":6277,"date":"2024-04-23T10:31:44","date_gmt":"2024-04-23T10:31:44","guid":{"rendered":"https:\/\/assignmenttask.com\/answers\/?p=6277"},"modified":"2024-04-23T10:31:44","modified_gmt":"2024-04-23T10:31:44","slug":"solved-question-a-company-sells-10000-shares-of-previously-authorized-stock-at-the-par-value-of-10-per-share","status":"publish","type":"post","link":"https:\/\/assignmenttask.com\/answers\/solved-question-a-company-sells-10000-shares-of-previously-authorized-stock-at-the-par-value-of-10-per-share\/","title":{"rendered":"Solved Question A Company Sells 10,000 Shares Of Previously Authorized Stock At The Par Value Of $10 Per Share"},"content":{"rendered":"

A Company Sells 10,000 Shares Of Previously Authorized Stock At The Par Value Of $10 Per Share. What\u2019s the correct entry to record the transaction?<\/strong><\/h2>\n

Are you searching for an expert for Assignment Questions & Answers<\/strong><\/a>? Don\u2019t worry about it! Our professional team at Assignment Task<\/strong><\/a> provides you with top-quality assignment writing services<\/strong><\/a> at the best price. Get 100% plagiarism-free work from our assignment expert<\/strong><\/a> with round-the-clock service. Order now!<\/p><\/blockquote>\n

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    \n
  1. \u00a0Debit cash $10,000, credit capital stock $10,000<\/li>\n
  2. \u00a0Debit capital stock $100,000, credit cash $100,000<\/li>\n
  3. \u00a0Debit cash $100,000, credit capita 11 stock $100,000<\/li>\n
  4. \u00a0Debit cash $100,000, credit treasury stock $100,000<\/li>\n
  5. \u00a0Debit cash $10, credit capital stock $10<\/li>\n<\/ol>\n

    Answer: 1: Debit cash $10,000, credit capital stock $10,000<\/strong><\/h3>\n

    Explanation:<\/strong><\/p>\n

    If a company sells the approved shares at the par value, the accounting entry reflects a debit of Cash Account for the sales amount and credit of the Capital Stock for the par value of the authorized shares issued.<\/p>\n

    Given:<\/p>\n

    Number of shares sold: One day there are 10,000.<\/p>\n

    Par value per share: Imagine that you have landed into a universe that is totally different from the one you are living in. This is the very moment that you have been separated from all human beings.<\/p>\n

    Calculations:<\/p>\n

    The total revenue from the sale of the shares equaled to 10,000 shares x 10 dollars per share = $100,000.<\/p>\n

    Value of Papers Issued = Stocks Available \u00d7 $10\/Share =$100,000.<\/p>\n

    Accounting Entry:<\/p>\n

    Debit Cash $100,000<\/p>\n

    Credit Capital Stock $100,000<\/p>\n

    Since the question asks for the correct entry to record the transaction, the appropriate option is:<\/p>\n

    Asset: Debit cash balance $10,000 Credit capital stock account $10,000.<\/p>\n

    This section comprised of 10,000 shares at a par value of $10 per share was sold with $100000 in cash.<\/p>\n

    The other options are incorrect because: The other options are incorrect because:<\/p>\n

      \n
    1. Invest: $100,000 in the means of production; cash: $100,000 (why?) (reverses the correct entry)<\/li>\n
    2. Debit cash $100,000; credit capital stock $100,000 (consistently wrong)<\/li>\n
    3. To debit $100,000 cash and credit $100,000 (treasury stock, which is not part of the transaction),<\/li>\n
    4. Debit cash account $10 and capital stock $10 (incorrect amounts)<\/li>\n<\/ol>\n

       <\/p>\n","protected":false},"excerpt":{"rendered":"

      A Company Sells 10,000 Shares Of Previously Authorized Stock At The Par Value Of $10 Per Share. What\u2019s the correct entry to record the transaction? Are you searching for an expert for Assignment Questions & Answers? Don\u2019t worry about it! Our professional team at Assignment Task provides you with top-quality assignment writing services at the best price. Get 100% plagiarism-free work from our assignment expert with round-the-clock service. Order now! \u00a0Debit cash $10,000, credit capital stock $10,000 \u00a0Debit capital stock $100,000, credit cash $100,000 \u00a0Debit cash $100,000, credit capita 11 stock $100,000 \u00a0Debit cash $100,000, credit treasury stock $100,000 \u00a0Debit Read More …<\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[729],"tags":[],"_links":{"self":[{"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/posts\/6277"}],"collection":[{"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/comments?post=6277"}],"version-history":[{"count":1,"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/posts\/6277\/revisions"}],"predecessor-version":[{"id":6278,"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/posts\/6277\/revisions\/6278"}],"wp:attachment":[{"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/media?parent=6277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/categories?post=6277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttask.com\/answers\/wp-json\/wp\/v2\/tags?post=6277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}