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    #1

    Feb 7, 2013, 08:09 PM
    How do I record an in return for cash transaction in a general ledger
    Do I debit cash in a general ledger if common stock is purchased in return for 37,000 cash?
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    pready Posts: 3,197, Reputation: 207
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    #2

    Feb 8, 2013, 11:27 AM
    You will Debit Cash because you are receiving cash, which is an asset (current asset) for the amount of cash received and you will Credit Common Stock for the amount of common shares of stock issued times the par value because you are issuing common stock, which is an owners equity account. You will also Credit Additional Paid-in Capital (if neccessary) for the difference between your debit and credit entries for the amount of the differrence. For example you issue 2 shares of commont stock for $100 and your par value is $10 a share your Debit will be to Cash for $50, a Credit to Commont Stock for $20 (2 shares * $10 a share par vaule), and Credit to Additional Paid-in Capital for $80 (the difference between your cash received and the amount of Par value times number of shares issued.
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