Todd Inc issued 2000 shares of 15 par value common stock at

Todd Inc. issued 2,000 shares of $15 par value common stock at $18 per share for cash. A) What Account/s and Amounts would you DEBIT, B) What Account/s and Amounts would you CREDIT. You must answer A) and B) correctly to receive full credit for this question.

Solution

Answers

A) Cash Account will be debited with $ 36000.00

B) Credit Additional paid in capital with $ 6000.00 and Credit Common Stock by $ 30000.00.

Following Journal entry will be made

Cash                                                                                                      $ 36000 .00

Additional Paid In Capital                                                                       $ 6000.00

Common Stock                                                                                          $ 30000.00

(Common Stock issued at premium)