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Question 1BE

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Intermediate Accounting (Kieso)
Found in: Page 811

Short Answer

Buttercup Corporation issued 300 shares of $10 par value common stock for $4,500. Prepare Buttercup’s journal entry.

In Buttercup Corporation's book, cash is debited.

Common stock and paid-in capital in excess of par common stock are credited.

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Step by Step Solution

Meaning of Common Stock

The term "common stock" refers to a type of security that represents a corporation's ownership. Common investors elect the board of directors, and they also have a say in business decisions.

Passing journal entry of Buttercup’s

Date

Particular

Folio

Debit USD

Credit USD

Cash A/c

4,500

To common Stock (300 x $10)

3,000

To paid-in capital in excess of

par common stock

1,500

(being share issued at par)

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