Smith & sons, inc., is authorized to issue one million shares of $1 par value common stock. the company actually sells 500,000 shares at $10 per share. prepare the journal entry to record the issuance of the 500,000 shares.

Answer and Explanation:

journal entry                                                  amount             amount

cash A/c   (500,000*$10) DR                       $5,000,000

common stock A/c (500,000*$1)                                            $500,000

additional paid in excess of value  A/c                                  $4,500,000

         (500,000*$9)