Comfort Mattresses Inc sold 26000 shares of its 1 par value

Comfort Mattresses, Inc. sold 26,000 shares of its $1 par value common stock at a cash price of $12 per share. The entry to record this transaction would be Multiple Choice Debit Cash $312,000; credit Common Stock $26,000; credit Paid-in Capital in Excess of Par Value, Common Stock $286,000. Debit Cash for $312,000; credit Common Stock $312,000. Debit Common Stock $26,000; debit Paid-in Capital in Excess of Par Value, Common Stock $286,000; credit Cash $312,000. Debit Cash $312,000; credit Stock Liability $286,000; credit Common Stock $26,000. Debit Common Stock $26,000; credit Cash $26,000.

Solution

Cash Collected = 26,000 Shares * $ 12

= $ 312,000

Par Value = 26,000 Shares * $ 1

= $ 26,000

Paid In Capital in excess of Par = 26,000 Shares * ( $ 12 - $1)

= $ 286,000

Hence, the correct answer is :

Debit Cash $ 312,000 ; credit Common Stock $ 26,000 ; credit Paid- in Capital in Excess of Par Value, Common Stock $ 286,000