Asked by Nazmi Olcar on Jul 17, 2024
Verified
The journal entry for the receipt of a cash payment on common stock subscriptions would include:
A) debiting Subscriptions Receivable-Common Stock; crediting Common Stock.
B) debiting Common Stock; crediting Subscriptions Receivable-Common Stock.
C) debiting Cash; crediting Subscriptions Receivable-Common Stock.
D) debiting Cash; crediting Common Stock Subscribed.
Subscriptions Receivable-Common Stock
An account that represents amounts due from subscribers who have agreed to purchase common stock of a company but have not yet paid.
Common Stock
Constitutes a type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.
- Record transactions related to stock subscriptions and their collections.
Verified Answer
MC
Madison CogdillJul 21, 2024
Final Answer :
C
Explanation :
When a company receives a cash payment on common stock subscriptions, it increases its cash balance (debit Cash) and decreases its subscriptions receivable (credit Subscriptions Receivable-Common Stock), reflecting the receipt of cash from subscribers who have committed to purchase common stock.
Learning Objectives
- Record transactions related to stock subscriptions and their collections.