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How to journal beginning balance with common stock
Began business by making a deposit in a company account of $12000, in exchange for 1200 shares of $10 par value common stock. I know that may cash account and common stock are affected, but I'm not sure how to journal it.
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Cash is an asset, which are debit accounts, and therefore increase with a debit. Stock is an equity account which are credit accounts, and therefore increase with a credit. So you're debiting the cash and crediting the stock. You picked out the right accounts... so from there you need to know what kind of account it is, whether you need to increase or decrease that account, and from there follow the rules, which hopefully are summarized in your text. |
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