Need quick help with Acct. 101 homework

Michalyn · #1 Jan 11, 2007, 11:39 AM

A friend of mine has a homework question she needs help with:

How the heck to I post this?

"Wells purchased 100 shares of Wells Consulting Services stock for $10,000"

The only accounts I have to choose from are:
Cash
A/R
Supplies
A/P
Capital Stock
Retained Earnings
Dividends
Professional Fees
Operating Expense
Supplies Expense

CaptainForest · Jan 11, 2007, 06:34 PM

Well, if you are buying 100 shares for $10,000 what are you doing?

You are giving them an asset, cash in the amount of 10,000.

In exchange you are receiving an asset, stock, valued at $10,000 (b/c that is what you paid for it).

Dr. Capital Stock 10,000
Cr. Cash 10,000



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