If a company issues 2,000 shares of common stock at a market price of $25 per share, which of the following is the correct balance sheet entry? a. Increase cash by $50,000 and increase the contributed capital section by $50,000 b. Increase cash by $50,000 and increase earned capital by $50,000 c. Decrease revenues by $20,000 d. Stock issuances

 

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If a company issues 2,000 shares of common stock at a market price of $25 per share, which of the following is the correct balance sheet entry? a. Increase cash by $50,000 and increase the contributed capital section by $50,000 b. Increase cash by $50,000 and increase earned capital by $50,000 c. Decrease revenues by $20,000 d. Stock issuances are not reported on the balance sheet

Expert Answer

Answer: a. Increase cash by $50,000 and increase the contributed capital section by $50,000 Rationa View the full answer