Question

comfort mattresses, incorporated 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:

Answer 1

The entry to record the transaction to sell shares will be:

DR Cash $312,000

CR Common Stock $26,000

CR Stock Premium $286,000

What is Journal Entry?

Journal entry is there a method of recording daily transactions of a company, the transactions are recorded in the form of debiting an account and crediting another account. These transactions are recorded daily and at the end of the month these transactions are accumulated and T-accounts are made through which Trial balance is made and then Balance sheet and income statements are made.

The transaction off comfort mattresses is of sale of common stock shares at a premium price, this transaction can be recorded as debiting the cash by $312,000 (26000 * $12), common stock account will be credited by $26,000 end stock premium account will be credited by the balancing figure that is $286,000.

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