How to Record Common Stock Issued in Your Journal Entries

If you are a business owner, it is important to understand how to record common stock issued in your journal entries.

This will help ensure that your company’s financials are accurately reported and that all transactions are properly recorded for tax purposes.

This blog post will review the steps in recording common stock issued in your journal entries.

Recording Common Stock Issued Step-by-Step

The first step in recording common stock issued is to identify the date of issuance and the number of shares issued. Once this has been identified, you can begin recording your journal entry.

Two accounts must be debited and credited when recording common stock issued: Common Stock (Equity Account) and Cash (Asset Account).

The Common Stock account should be debited for the amount of money received from issuing the shares of common stock, while the Cash account should be credited for the same amount.

To illustrate this further, here is an example of a journal entry for issuing 1,000 shares of common stock at $20 per share:

 Debit Credit Common Stock $20,000  and Cash $20,000 

In addition to these two accounts, other accounts may also need to be adjusted depending on whether or not any additional consideration was given when issuing the shares of common stock (e.g., if additional services were provided).

For example, if 1,000 shares were issued at $25 per share, but an additional $5 was paid for each share as a service fee, then you would need to debit Service Fees for $5,000 and credit Cash for $25,000.

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This would result in an overall debit of $25,000 and credit of $25,000 as follows:

Debit Credit  Common Stock $20,000

Debit Service Fees $5,000           

Credit Cash $25,000 

Conclusion:

Recording common stock issued is an important part of managing your business’s finances. Understanding how to record journal entries for common stock issued correctly and accurately documenting all transactions related to issuing these stocks can help ensure that all financials are accurately reported and any deductions taken come tax time are legitimate.

Hopefully, this blog post has helped you better understand how to record journal entries for common stock issued so that you can ensure accurate reporting in the future!