A corporation sold 14,000 $10 par value ordinary shares at a cash price of $13 per share. The entry to record this transaction would include:

A) A debit to Share Premium-Ordinary for $42,000.
B) A debit to Cash for $140,000.
C) A credit to Share Capital-Ordinary for $182,000.
D) A credit to Share Capital-Ordinary for $140,000.
E) A credit to Share Premium-Ordinary for $182,000.

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Esther candio · Accepted Answer

Final Answer : D, Explanation :  The sale of ordinary shares at a cash price of $13 per share would result in a credit to Share Capital-Ordinary for the total amount of shares sold, which is $140,000 (14,000 x $10). Therefore, the correct entry would be a credit to Share Capital-Ordinary for $140,000. The Share Premium-Ordinary account would only be used if the shares were sold at a price higher than their par value, which is not the case in this scenario.

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