Justin Corp. issues 10,000 shares of $1 par value common stock for $5 per share. The journal entry to record this transaction will include which of the following? (Check all that apply.)

The record of the issuance of the stock is debit to cash for $50,000, credit to common stock for $10,000 and credit to excess of common stock of $40,000.

Explanation:

A. Entries of the stock

1. Account (cash)

Cash=10,000 shares at $5 per share

Cash=10,000*5=$50,000

Cash to Debit=$50,000

Credit this account=$0

2. Account (common stock)

Common stock=10,000 shares at $1 per value common stock

Common stock=10,000*1=$10,000

Credit account=$10,000

Debit this account=$0

3. Account (Paid-in Capital in Excess of Par - Common Stock)

Paid in capital in excess of par-common stock=50,000-10,000=$40,000

Credit this account=$40,000

Debit this account=$0

This can be written as;

Account Debit ($) Credit ($)

Cash (10,000 shares*$5 price) 50,000

Common Stock (10,000 shares*$1 par) 10,000

Paid-in Capital in Excess of Par - Common Stock 40,000

The record of the issuance of the stock is debit to cash for $50,000, credit to common stock for $10,000 and credit to excess of common stock of $40,000.