If a Corporation Issues 1,000 Shares of $1 Par Value

Multiple Choice

If a corporation issues 1,000 shares of $1 par value common stock at $5 per share, how should the transaction be accounted for?

A) debit cash for $5,000 and credit common stock for $5,000
B) debit cash for $5,000 and credit common stock for $1,000 and credit additional paid-in capital for $4,000
C) debit cash for $5,000 and credit common stock for $1,000 and credit retained earnings for $4,000
D) credit cash for $5,000 and debit common stock for $5,000
E) debit common stock for $1,000 and debit retained earnings for $4,000 and credit cash for $5,000